Dollar Up From 13-Month Low Ahead Of Fed Decision

shutterstock_335397047

The U.S. dollar is up from 13-month lows against the other major currencies on Wednesday as investors awaited the result of the Federal Reserve’s latest policy meeting and decision later in the day.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.09% at 94.00, moving away from Tuesday’s 13-month low of 93.46.

FOMC Statement

The Fed is widely expected to keep policy on hold, but Investors were hoping that the Fed’s rate statement, due later Wednesday, will reveal more about policy plans for the second half of the year, with markets paying close attention to details of when and how the Fed will start reducing its $4.5 trillion balance sheet.

Doubts over the Feds plans for a third rate hike this year have recently weighed on the greenback.

Markets have reduced expectations for a U.S. interest rate increase in the coming months with expectations of another rate hike at less than 50 percent before the end of the year.

“If there is no change in the language of the statement, we can expect a mild dollar rally and there would be a better opportunity for the Fed to communicate its policy expectations at Jackson Hole next month,” said Ulrich Leuchtmann, a currency strategist.

Investors also stayed focused on the investigation into alleged links between U.S. President Donald Trump’s administration and Russia in last year’s election.

On Monday, Jared Kushner, Trump’s son-in-law and a senior White House adviser, told Senate investigators he had met with Russian officials four times last year but said he did not collude with Moscow.

Investors fear the persistent political turmoil will disrupt the Trump administration’s pro-growth economic agenda of tax cuts and infrastructure spending, which helped propel the dollar to 14-year peaks after the November election.

Dollar Against Other Currencies

Euro against the dollar was little changed at 1.1627, off session lows of 1.1613, while the sterling edged up against the greenback 0.09% to 1.3040, erasing earlier losses, after the U.K. Office for National Statistics said gross domestic product rose by 0.3% in the three months to June, from 0.2% growth in the first three months of the year, wherein economists had forecast growth of 0.3%.

On a year-over-year basis the economy expanded by 1.7% from 2.0% in the first quarter, also in line with forecasts.

Moreover, the dollar was little changed against the safe-haven yen at 111.91, while it climbed against the swiss franc 0.60% to trade at 0.9581.Lastly, the Australian dollar remained weak, with the Aussie dollar down 0.23% at 0.7919, while the New Zealand dollar or kiwi added 0.18% to 0.7431.

Want to become an investor/trader in the stock market? Fill yourself in on marketing news by subscribing to Trade12. We encourage traders to know more about the latest information about forex, stock markets, commodities, and economies.

Can’t handle your funds properly? Exo Capital Markets will help you manage your funds. Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

Advertisements

Dollar Continues To Slump, Sinks To 10-Month Lows

shutterstock_378044131

The U.S. dollar continues to slump as it sank to 10-month lows against the other major currencies on Tuesday, after an attempt to pass healthcare reform collapsed and amid a sell-off ignited by another setback to U.S. President Donald Trump’s agenda and doubts over prospects for another rate hike this year.

Greenback Sinks Against Major Currencies

The U.S. dollar index against a group of six major currencies was 0.64% lower at 94.31, the lowest trough since September 9, 2016.

The dollar was at almost three-week lows, weaker against the yen, with USD/JPY down 0.55% to 112.00, after falling as low as 111.99 overnight.

The euro rose to fresh 14-month highs against the dollar, with EUR/USD advancing 0.86% to 1.1577, after touching overnight highs of 1.1538.

Sterling was lower, with GBP/USD down 0.26% to 1.3022 after data showing that the annual rate of inflation in Britain fell for the first time since October last month.

Healthcare Issue and Rate Hike

The dollar came under renewed selling pressure after a second attempt by Republicans to replace Obamacare collapsed late Monday, bringing a major policy blow to the Trump administration.

Around half of the cuts in healthcare spending were reserved to finance proposed tax cuts. The failure to deliver healthcare reform added to disappointment over the lack of progress on Trump’s economic agenda.

The dollar was already on the defensive side after Friday’s weak U.S. inflation and retail sales data that  added to doubts that the Fed will be able to raise interest rates again this year.

Other Currencies

Elsewhere, the Australian dollar jumped to two-year highs, with AUD/USD,  adding 1.59% to trade at 0.7926, after the minutes from the central bank’s last policy meeting showed it turning more positive on the economic outlook.

The New Zealand dollar was also higher, with NZD/USD rising 0.61% to 0.7364. The kiwi initially turned lower overnight before regaining ground after weak inflation data indicated that the country’s central bank will keep interest rates on hold for longer.

The Canadian dollar hit fresh 14-month highs, with USD/CAD last at 1.2624.

Want to become an investor/trader in the stock market? Fill yourself in on marketing news by subscribing to Trade12. We encourage traders to know more about the latest information about forex, stock markets, commodities, and economies.

Can’t handle your funds properly? Exo Capital Markets will help you manage your funds. Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

Dollar Increases Gains Against Other Currencies

shutterstock_194193608

The dollar extended gains against the other major currencies on Monday, pulling away from nine-month lows, but the greenback’s upside was expected to stay limited amid expectations for tighter monetary policy by major central banks.

The euro dropped against the dollar 0.51% to 1.1369, off Friday’s 13-month peak of 1.1448, while the sterling declined 0.47% to 1.2967, pulling away from last week’s six-week high of 1.3032.

The dollar index against a group of six major currencies was 0.50% higher at 95.86, crawling off a nine-month trough of 95.470 plumbed on Friday.

In last week’s comments, the heads of the European Central Bank, the Bank of England and the Bank of Canada embraced a more aggressive view on monetary policy, indicating that they were getting ready to join the Federal Reserve in policy tightening.

Aggressive signals from foreign central banks contrasted with doubts over whether the Fed will be able to carry out hike rates again this year given a recent batch of weak U.S. economic data and growing skepticism that the Trump administration will be able to deliver on its pro-growth agenda.

Elsewhere, the greenback rallied against the yen and swiss franc 0.55% to 113.04 and 0.50% to trade at 0.9626, respectively. Meanwhile, the aussie dollar and kiwi were weaker against the dollar, down 0.44% to 0.7656 and 0.55% to 0.7292, respectively.

The yen briefly rose after Japanese Prime Minister Shinzo Abe’s Liberal Democratic Party suffered an historic defeat in an election in Tokyo on Sunday, in a vote that could be a harbinger for national elections.

“The Tokyo election won’t have a strong market impact, in my view, as there are no opposition parties in Japan that can immediately replace the (ruling) LDP,” said Yukio Ishizuki, a senior currency strategist.

Want to become an investor/trader in the stock market? Fill yourself in on marketing news by subscribing to Trade12. We encourage traders to know more about the latest information about forex, stock markets, commodities, and economies.

Can’t handle your funds properly? Exo Capital Markets will help you manage your funds. Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

Euro Rallies Amid Political Worries over Several European Countries

shutterstock_224540815

The European currency surged back after weakening against the dollar earlier amid political worries over Greece, Italy and Britain as European geopolitical fears weakened risk appetite.

EUR/USD was up 0.20% to $1.1186 by 10:29 ET, after falling as low as 1.1108.

The single currency came under pressure in early trade as worries over Greece’s bailout, the prospect of an early Italian general election and European Central Bank President Mario Draghi’s comments about the need for continued stimulus all weighed.

James Woods, a global investment analyst in Sydney, attributed most of the currency’s decline on Tuesday, saying Athens may opt out of its next bailout payment if creditors cannot get a debt relief deal done.

“The bailout payments are necessary to meet existing debt repayments due in July, so if Greece were to forgo this bailout payment the probability of a default would spike, reopening the discussion around a Grexit from the Euro zone,” Woods said.

However, he warned against reading “too much into it” without more details or confirmation, adding it was doubtful Greece would forgo the bailout payment at this stage.

Euro zone finance ministers failed to agree with the International Monetary Fund on Greek debt relief or to release new loans to Athens last week, but did come close enough to intend to do both at their June meeting.

Comments by former Italian Prime Minister Matteo Renzi on Sunday in favor of holding an election at the same time as Germany’s in September also raised uncertainty and pulled the euro lower earlier.

So did a statement by European Central Bank President Mario Draghi reiterating the need for “substantial” stimulus given subdued inflation.

Meanwhile, sterling pushed higher, rising 0.3% to $1.2877, despite British Prime Minister Theresa May’s lead over the opposition Labor Party dropped to as low as 5-6 percentage points in the latest poll to show a tightening race since the Manchester bombing and a U-turn over social care plans,  which adds to political risk around Brexit as well.

Recent polls have indicated that Prime Minister Theresa May’s Conservative Party has less of a lead over the Labor Party than expected.

The pound was also higher against the euro, with EUR/GBP down 0.09% at 0.8703.

Moreover, the greenback index was at 97.23, off the day’s highs of 97.67 as the firmer euro weighed up.

Last week the index plumbed lows of 96.79, its weakest level since November 9 amid uncertainties over the Trump administration.

Want to become an investor/trader in the stock market? Fill yourself in on marketing news by subscribing to Trade12. We encourage traders to know more about the latest information about forex, stock markets, commodities, and economies.

Can’t handle your funds properly? Exo Capital Markets will help you manage your funds. Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

Pound Sags After Deadly Manchester Explosion

shutterstock_379061740

Sterling slipped on Tuesday after a suspected suicide attack killed at least 22 people and wounded 59 at a pop concert in the English city of Manchester.

Sterling eased 0.1 percent to $1.298, extending Monday’s 0.3 percent loss. The pound dropped 0.3 percent to 144.34 yen, after losing 0.2 percent on Monday.

The attack came up just two-and-a-half weeks before an election that Prime Minister Theresa May is expected to win easily, though polls showing that the contest was tightening put the sterling under pressure.

At least 22 people were murdered in a suicide bombing at a pop concert by U.S. singer Ariana Grande along with children in the northern English city of Manchester. Fifty-nine (59) others were injured in the attack carried out by a suicide bomber, who died after detonating an improvised explosive device.

If the attack on the concert is confirmed as a terrorist attack, this would be the worst and deadliest attack in Britain by militants since four British Muslims killed 52 people in suicide bombings on London’s transport system in July 2005.

“This has been the most horrific incident we have had to face in Greater Manchester and one that we all hoped we would never see.” said Hopkins. “We have been treating this as a terrorist incident and we believe, at this stage, the attack last night was conducted by one man. The priority is to establish whether he was acting alone or as part of a network.”

Euro At Six-Month High

The euro hit a six-month high overnight after German Chancellor Angela Merkel said it was “too weak” due to the ECB’s monetary policy, pointing out that this helped explain Germany’s relatively high trade surplus.

The common currency jumped 0.1 percent to $1.1249 after jumping as much as 0.5 percent and closing 0.3 percent higher on Monday.

Junichi Ishikawa, a senior FX strategist in Tokyo, said that Merkel’s comments boosted the euro and so the weakened dollar is not essentially a bad thing for Trump.

The chancellor’s comments delivered fresh momentum to the euro, which has been on a bullish footing since the French presidential elections earlier this month. Upbeat euro zone data and a widening spread between the 10-year German and U.S. government bond yields have also supported the currency.

Moreover, The safe-haven yen advanced against major peers like the dollar and euro but its gains were modest.

The dollar was barely down 0.09 percent at 111.14 yen after a dip to 110.860 but the euro rallied 0.03 percent to 125.12 yen.

The dollar index, which tracks the greenback against a basket of trade-weighted peers, was 0.1 percent lower at 96.80.

Check out Trade12 and just subscribe to read more. We encourage traders to know more about the latest information about forex, stock markets, commodities, and economies.

Can’t handle your funds properly? Exo Capital Markets will help you manage your funds. Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

Greenback Edges Up as Yields Rise but Trump Policy Concerns Cap Gains

On Friday, the greenback inched up against the yen and euro, dragging away from recent slumps, but increased were capped as investors concentrated on a showdown between U.S. President Donald Trump and members of his own party over a new healthcare bill.

dono-2

On Friday, the greenback inched up against the yen and euro, dragging away from recent slumps, but increased were capped as investors concentrated on a showdown between U.S. President Donald Trump and members of his own party over a new healthcare bill.

Trump advised House Republican lawmakers that he will leave Obamacare in place and move on to tax reform if they do not get behind new healthcare legislation and support it in a vote on Friday.

Delay of the vote from Thursday initially hits the greenback  and stock markets, however, the greenback was given breathing space as Treasury yields become higher after Wall Street shares cut losses to close little changed.

Equities in Asia took heart and firmed on Friday, with Japan’s Nikkei (N225) increasing 1 percent.

“The dollar had been sold on the assumption that the healthcare bill would not pass, but some of those positions look to have been unwound. The market focus appears to have shifted to how Trump can pass the bill, from if he can push the bill through,” said Bart Wakabayashi, branch manager for State Street Bank and Trust in Tokyo.

“U.S. yields are higher and it’s not hard for dollar/yen to attract bids. It is often overlooked but the dollar continues to enjoy underlying support from widening U.S.-Japanese interest rate spreads.”

The greenback increased  0.35% at 111.340 yen, pulling back from a four-month low of 110.620 struck overnight.

“The U.S. currency was still on track for a 1.2% loss against its the yen this week, during which the safe-haven yen benefited from equity market volatility.”

The yen has also gained from a scandal linking a land agreement that has chipped away support for Prime Minister Shinzo Abe.

Although that may look counterintuitive, the yen has been a safe-haven of choice, even when risk events originate domestically.

When a shocking earthquake struck Japan in March 2011,  the currency rallied and caused a nuclear disaster, prompting an intervention by Tokyo to arrest its surge.

On Additional News

The healthcare vote, which had been projected to be an early legislative win for Trump, is perceived by investors as a litmus test for his ability to work with Congress and push through key policies like tax reform and infrastructure spending.

“Even if the bill happens to be passed, any bounce by the dollar is likely to be limited. There are plenty of other issues Trump has to contend with going forward, such as tax reforms,” said Ayako Sera, senior market economist at Sumitomo Mitsui Trust.

The pound declined 0.3% at $1.2490. It scaled a one-month peak of $1.2532 overnight on upbeat British retail sales statistics.

The Australian dollar decline to an eight-day low of $0.7610 following a drop in the price of iron ore, the country’s key export product.

Traders are encouraged to be updated with the latest market news at Trade12.com.Check out Trade12 reviews to know more about the trending economic events. Open an account now and learn more!

Financial trouble?  Let Exo Capital Markets manage your funds accordingly.  Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

 

Dollar Slumps on Lower Yields, Euro dogged by Political Concerns

On Monday, a slide in U.S. bond yields pressured the greenback against the yen, while the euro fight for traction after suffering important losses at the end of the previous week on renewed concerns regarding the upcoming French elections.

dono-2

On Monday, a slide in U.S. bond yields  pressured the greenback  against the yen, while the euro fight for traction after suffering important losses at the end of the previous  week on renewed concerns regarding  the upcoming French elections.

Markets, already worried over the probability of a win for far-right, anti-European Union candidate Marine Le Pen, were shaken after two French hard-left candidates late on Friday stated  they were discussing cooperation in their bid for the country’s presidency.

The anxiety in markets is that a unified left-wing front cause the centrist vote to move toward Le Pen.

The current spike in European political risks pushed down the greenback  against the yen by pushing down Treasury yields to one week lows of 2.4%, 12:32AM ET.

The greenback slightly changed at 113.090 yen, not far from 112.620, its lowest since Feb. 9 touched on Friday.

The dollar index against a basket of currencies was steady at 100.930 (DXY). Earlier this month, the index had increased for 10 straight days before losing momentum in spite of a string of solid U.S. data, to the frustration of dollar bulls.

“It is hard for dollar/yen to move higher when the 10-year Treasury yield, which initially rose to as high as 2.6 percent, is not stuck around 2.4 percent,” said Koji Fukaya, president of FPG Securities in Tokyo.

The Treasury 10-year yield (US10YT=RR) increased above 2.6% in December to a two-year peak when potentials were at their peak that Donald Trump would embark on large fiscal stimulus and reflationary policies once he became president.

“There is also the possibility of the next U.S. rate hike being pushed back to May instead of March. The Fed might not be inclined to hike rates, and thus induce a rise in yields, just on the Trump administration’s deregulation moves and tax cuts,” Fukaya said.

Expectations of developments in fiscal stimulus plans under Trump have not happened yet, cancelling out some of the recent dollar-supportive factors.

On Thursday, a combative presidential news conference increased doubts over how effective the Trump administration will be in pushing through its economic agenda.

The euro crawled up 0.1% to 1.0613 after declining 0.6% on Friday. The common currency pushed up 0.2% to 120.010 yen (EURJPY=) after plumbing an 11-day low of 119.650. It had glided approximately 1% on Friday against the yen.

“The latest round of risk aversion that supported the yen is likely to be a sporadic one, as equities are still well supported globally. It is not the typical ‘risk off’ that engulfs the broader financial markets and leads to the safe-haven buying of the yen,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities.

Somewhere else, the pound was flat at $1.2414 after declining 0.7% on Friday, after a surprise 3rd monthly dropped in British retail sales pointed to lessening consumer sentiment.

The Australian dollar plunged 0.1% to $0.7670 but still in touch of a 3-1/2 month peak of $0.7732 scaled the previous week.

This year, the Aussie has enjoyed steady support from an increased in the price of iron ore, the country’s chief export. However, doubt regarding the country’s monetary policy and economic performance has prevented the currency from making additional gains.

The New Zealand dollar declined 0.1% at $0.7177. Concentration was on Wednesday’s global dairy price auction. The kiwi is frequently impacted by the price of milk, New Zealand’s top export product.

Traders are encouraged to be updated with the latest market news at Trade12.com.Check out Trade12 reviews to know more about the trending economic events. Open an account now and learn more!

 

Financial trouble?  Let Exo Capital Markets manage your funds accordingly.  Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.