Dollar remains broadly lower in quiet trade

Forex

The dollar remained broadly lower against the other major currencies on Tuesday, as investors remained cautious ahead of Friday’s speech y Federal Reserve Chair Janet Yellen.

Market participants are waiting to see if Yellen will restate the hawkish view of the economy expressed by Fed officials in recent weeks or echo the minutes of the Fed’s July meeting, which indicated that officials are divided on when to raise rates.

The dollar moved broadly higher after Fed Vice Chair Stanley Fischer said on Sunday that inflation is within “hailing distance” of the bank’s 2% target.

The comments came after speeches last week from San Francisco Fed head John Williams and New York Fed chief William Dudley indicating that the central bank thinks the economy is strong.

The U.S. Commerce Department reported on Tuesday that new home sales jumped by 12.4% to 654,000 units last month, compared to expectations for a 2.0% decline.

New home sales in June were revised down to 582,000 units, or a 1.7% gain, from the prior reading of a 3.5% increase to 592,000 units.

EUR/USD was steady at 1.1325, off session highs of 1.1355 after research group Markit reported that Germany’s manufacturing purchasing managers’ index slipped to a two-month low of 53.6 in August from 53.8 the previous month, confounding expectations for a slip to 53.5.

Germany’s services PMI fell to a 15-month low of 53.3 this month from 54.4 in July, compared to expectations for an unchanged reading.

Markit also said that the French manufacturing PMI ticked down to 48.5 in August from 48.6 last month, compared to expectations for a rise to 48.8.

The French services PMI rose to 52.0 this month from 50.5 in July, beating expectations for an unchanged reading.

For the entire euro zone, the composite PMI, which measures the combined output of both the manufacturing and service sectors ticked up to 53.3 in August from 53.2 in July, compared to expectations for a slip to 53.1.

GBP/USD gained 0.36% to trade at 1.3182.

USD/JPY slipped 0.20% to 100.12, while USD/CHF fell 0.21% to 0.9606.

Sentiment on the yen remained fragile after Bank of Japan Governor Haruhiko Kuroda saidover the weekend that there is a “sufficient chance” the central bank will implement additional easing measures at next month’s policy meeting.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.30% at 0.7643 and with NZD/USD advancing 0.70% to 0.7323.

The New Zealand dollar strengthened after Reserve Bank of New Zealand Governor Wheeler said the bank’s current interest rate policy involves further monetary easing measures but he said he did not see the need for a rapid series of rate cuts.

Elsewhere, USD/CAD shed 0.31% to 1.2907.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.14% at 94.38.

Source by Investing.com

Dollar slips lower as focus turns to Yellen

Forex

The dollar slipped lower against the other major currencies on Tuesday, as investors became more cautious ahead of Friday’s speech y Federal Reserve Chair Janet Yellen.

Market participants are hoping Ms. Yellen will give further indications on the timing of future rate hikes.

The dollar moved broadly higher after San Francisco Federal Reserve President John Williams late last week signaled support for a September rate increase.

EUR/USD was up 0.11% at 1.1332, off session highs of 1.1355 after research group Markit reported that Germany’s manufacturing purchasing managers’ index slipped to a two-month low of 53.6 in August from 53.8 the previous month, confounding expectations for a slip to 53.5.

Germany’s services PMI fell to a 15-month low of 53.3 this month from 54.4 in July, compared to expectations for an unchanged reading.

Markit also said that the French manufacturing PMI ticked down to 48.5 in August from 48.6 last month, compared to expectations for a rise to 48.8.

The French services PMI rose to 52.0 this month from 50.5 in July, beating expectations for an unchanged reading.

For the entire euro zone, the composite PMI, which measures the combined output of both the manufacturing and service sectors ticked up to 53.3 in August from 53.2 in July, compared to expectations for a slip to 53.1.

GBP/USD gained 0.36% to traede at 1.3181.

USD/JPY slipped 0.15% to 100.17, while USD/CHF eased 0.09% to 0.9616.

However, sentiment on the yen remained fragile after Bank of Japan Governor Haruhiko Kuroda said over the weekend that there is a “sufficient chance” the central bank will implement additional easing measures at next month’s policy meeting.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.28% at 0.7641 and with NZD/USD advancing 0.71% to 0.7324.

The New Zealand dollar strengthened after Reserve Bank of New Zealand Governor Wheeler said the bank’s current interest rate policy involves further monetary easing measures but he said he did not see the need for a rapid series of rate cuts.

Elsewhere, USD/CAD shed 0.26% to 1.2912.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.17% at 94.36.

Source by Investing.com

Forex - Aussie and kiwi move lower vs. stronger greenback

Forex

The Australian and New Zealand dollars moved lower against their U.S. counterpart on Monday, as fresh expectations for an upcoming U.S. rate hike continued to support demand for the greenback.

AUD/USD slid 0.45% to 0.7594, the lowest since August 4.

The greenback remained supported after San Francisco Federal Reserve Bank President John Williams on Thursday signaled support for a September rate increase.

"In the context of a strong domestic economy with good momentum, it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later," he said.

Minutes of the Federal Reserve's July policy meeting published earlier in the week showed committee members remained divided on the timing of the next rate hike, although there is general agreement that more data is needed before such a move.

NZD/USD declined 0.65% to trade at 0.7226, the lowest since August 17.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.39% at 94.86, the highest since August 17.

Source by Investing.com

Forex - Weekly outlook: August 22 - 26

Forex

The U.S. dollar rose against a basket of major currencies on Friday, bouncing off a seven-week low as comments by San Francisco Federal Reserve Bank President John Williams reignited some hopes for a near-time rate hike.

Odds for a near-term rate hike came back in focus after Williams signaled support for a September rate increase in a Thursday afternoon speech.

"In the context of a strong domestic economy with good momentum, it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later," he said.

Williams's speech was just the latest piece of hawkish rhetoric from top Fed officials. Earlier this week, New York and Atlanta Fed presidents William Dudley and Dennis Lockhart both said a September rate hike may be on the table.

According to Investing.com's Fed Rate Monitor Tool, investors are pricing in a 12% chance of a rate hike by September. December odds were at around 46%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, tacked on 0.4% on Friday to close the week at 94.48, as investors began to price in a greater likelihood that the Fed will raise rates this year.

Despite Friday's gains, the greenback still ended with a weekly loss of 1.25% amid conflicting messages over the timing of the next U.S. rate hike.

Minutes of the Federal Reserve's July policy meeting published earlier in the week showed committee members remained divided on the timing of the next rate hike, although there is general agreement that more data is needed before such a move.

Against the yen, the dollar inched up 0.3% to end at 100.21 by late trade. The greenback touched a low of 99.50 on Tuesday, the lowest level since the U.K.’s decision to leave the European Union in late June. For the week, the pair lost 1.1%, the fourth straight weekly decline.

The euro, meanwhile, slipped 0.25% to settle at 1.1323, coming off the prior session's eight-week high of 1.1365. On the week, the single currency rose 1.5% against the dollar, the second weekly gain in a row.

Elsewhere, the pound settled at 1.3076 against the greenback, down 0.7% for the day but 1.2% higher for the week, amid easing concerns over post-Brexit growth prospects.

Sterling climbed to as high as 1.3184 after data showed that retail sales, employment and inflation all beat forecasts, suggesting that the British economy remained resilient in wake of the U.K.’s decision to leave the European Union.

Earlier in the week, sterling had threatened to test a 31-year low of $1.2798 set in July, dogged by worries that forthcoming U.K. data could provide the first proof of economic damage from the Brexit vote in June.

In the week ahead, market players will be turning their attention to a highly anticipated speech by Federal Reserve Chair Janet Yellen for fresh clues on the timing of the next U.S. rate hike.

In addition, investors will continue to focus on U.S. economic reports to gauge if the world's largest economy is strong enough to withstand a rate hike in the coming months, with Friday’s revised second quarter growth data in the spotlight.

Meanwhile, market participants will be looking ahead to a second reading on U.K. growth data for further indications on how business investment and consumer spending performed in the run-up to the Brexit vote.

Traders will also be looking to Tuesday’s survey data on euro zone business activity for fresh signals on the health of the region's economy in wake of Britain's vote to exit the European Union earlier in the summer.

Elsewhere, Japanese inflation data will also be in focus as investors assess the need for further stimulus in the world's third's largest economy.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, August 22

Canada is to release data on wholesale sales.

Tuesday, August 23

Bank of Japan Governor Haruhiko Kuroda is to speak at an event in Tokyo.

The euro zone is to release survey data looking at private sector activity.

The U.S. is to publish data on new home sales.

Wednesday, August 24

New Zealand is to report on the trade balance.

Australia is to release figures on completed construction work.

The U.S. is to produce a report on existing home sales as well as weekly data on oil supplies.

Thursday, August 25

The Ifo Institute is to report on German business climate.

The U.S. is to release data on jobless claims and durable goods orders.

The Jackson Hole annual meeting of top central bankers and economists due to take place in Wyoming from Thursday to Saturday kicks off.

Friday, August 26

Japan is to release data on inflation.

The U.K. is to release revised data on second quarter economic growth.

The U.S. is also to produce revised data on second quarter growth, as well as a second look at consumer sentiment from the University of Michigan.

Fed Chair Janet Yellen is to speak in Jackson Hole. Speculation is rife that she will use the speech to start the race for a rate hike as soon as September following a recent barrage of hawkish Fed speakers.

The annual Fed symposium has sometimes been used by Fed chairs to make important policy pronouncements.

Source by Investing.com

Forex - Dollar firms up ahead of Fed meeting minutes

Forex

The dollar firmed up against the other major currencies on Wednesday as investors looked ahead to the minutes of the Federal Reserve’s July meeting due for release later in the trading day.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged up to 94.85, holding above Tuesday’s seven-week lows of 94.38.

Investors were looking to the minutes of the Fed’s July meeting for possible indications on the future path of interest rates.

The U.S. central bank left rates unchanged at its meeting last month, but opened the door to rate hikes later this year and indicated that risks to the economy had diminished since June.

Comments by a Fed official on Tuesday supported the view that rates could still rise later this year.

New York Fed head William Dudley said a rate increase as early as September is “possible.”

The U.S. central bank raised interest rates for the first time in almost a decade in December.

Higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.

The dollar had weakened across the board on Monday in the wake of a paper from San Francisco Fed head John Williams arguing that central banks might have to lift inflation targets and favor looser fiscal policy in future..

The euro was holding below seven-week highs, with EUR/USD steady at 1.1275.

The dollar moved higher against the yen, with USD/JPY rising 0.38% to 100.68.

The pound dipped against the dollar, with GBP/USD easing 0.15% to 1.3027.

Sterling remained supported above 1.30 after the latest U.K. jobs report gave little indication that the Brexit vote was affecting the labor market.

Source by Investing.com

Forex - USD/CAD trims gains ahead of Fed meeting minutes

Forex

The U.S. dollar trimmed gains against its Canadian counterpart on Wednesday, as investors remained cautious ahead of the minutes of the Federal Reserve’s latest policy meeting, due to be released later in the day.

USD/CAD pulled back from 1.2917, the session high, to hit 1.2875 during early U.S. trade, still up 0.11%.

The pair was likely to find support at 1.2793, Tuesday’s low and a one-and-a-half month low and resistance at 1.2976, Monday’s high.

The dollar strengthened broadly after Atlanta Federal President President Dennis Lockhart said on Tuesday that two rate hikes in 2016 were a possibility.

The comments came shortly after New York Fed head William Dudley said that the U.S. central bank might raise rates as soon as its September policy meeting.

The Fed kept interest rates unchanged following its meeting on July 27 and said near-term risks to the U.S. economic outlook had diminished. However, the central bank stopped short of signaling a near-term rate rise.

Meanwhile, the commodity-related Canadian dollar remained under pressure as oil prices moved back lower on Wednesday on bets for bearish U.S. stockpile data later in the day.

The loonie was fractionally lower against the euro, with EUR/CAD easing up 0.08% to 1.4519.

Source by Investing.com

Forex - Aussie, kiwi move lower despite upbeat economic reports

Forex

The Australian and New Zealand dollars moved lower against their U.S. counterpart on Wednesday, despite the release of upbeat data from New Zealand as fresh hopes for a 2016 rate hike by the Federal Reserve lifted demand for the greenback.

NZD/USD slid 0.34% to 0.7260.

Earlier Wednesday, Statistics New Zealand said that the number of employed peopleincreased by 2.4% in the second quarter, exceeding expectations for a 0.6% gain and after a 1.2% rise in the three months to March.

The unemployment rate fell to 5.1% in the last quarter from 5.7% in the first quarter, compared to expectations for a slip to 5.3%.

AUD/USD fell 0.21% to trade at 0.7678.

The Australian Bureau of Statistics reported on Wednesday that its wage price index edged up 0.5% in the second quarter, in line with expectations. Wage prices increased by 0.5% in the first quarter, whose figure was revised from a previously estimated uptick of 0.4%.

Year-on-year, wage prices rose 2.1% in the three months to June, beating expectations for a 2.0% gain.

But demand for the greenback strengthened broadly after New York Federal Reserve head William Dudley said on Tuesday that the U.S. is edging closer toward the point in time where it will be appropriate to raise interest rates further.

In addition, Atlanta Fed President Dennis Lockhart said that two rate hikes in 2016 were a possibility.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.18% at 94.92, off the previous session’s seven-week low of 94.38.

Source by Investing.com

Forex - Aussie and kiwi move higher after RBA meeting minutes

Forex

The Australian and New Zealand dollars moved higher against their U.S. counterpart on Tuesday, following positive comments by the Reserve Bank of Australia and as disappointing U.S. data continued to weigh broadly on the greenback.

AUD/USD gained 0.42% to 0.7705.

In the minutes of its August policy meeting, the RBA said economic growth was expected to pick up to be above estimates of potential by mid 2017.

This statement differed from the central bank’s statement made on August 5, forecasting a pickup in growth in 2018.

The upbeat outlook contradicted previous expectations for further rate cuts by the RBA. At the beginning of the month, the central bank lowered its benchmark interest rate to a record-low 1.5%.

NZD/USD advanced 0.65% to trade at 0.7262.

Meanwhile, the greenback remained under broad selling pressure after a recent string of disappointing U.S. economic reports fueled concerns over the strength of the economy and dampened expectations for a rate hike before the end of the year.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.48% at 95.12, the lowest since August 3.

Source by Investing.com

Dollar edges lower vs. rivals as U.S. data still weighs

Forex

The dollar edged lower against the other major currencies on Monday, as Friday’s disappointing U.S. economic reports continued to weigh on demand for the greenback.

EUR/USD eased up 0.08% to 1.1170.

The greenback weakened broadly after the U.S. Commerce Department said on Friday that retail sales were flat in July, compared expectations for a 0.4% rise. Core retail sales, which exclude automobile sales, fell by 0.3% in July.

A separate report showed that U.S. producer prices fell by 0.4% last month, disappointing expectations for a 0.1% rise. Year-over-year, producer prices decreased by 0.2%.

In addition, the University of Michigan said its consumer sentiment index rose to 90.4, from July’s reading of 90.0. Analysts had forecast a larger increase to 91.5.

The downbeat data fueled concerns over the strength of the U.S. economy and dampened expectations for a 2016 rate hike by the Federal Reserve.

GBP/USD held steady at 1.2912, close to Friday’s one-month low of 1.2934.

USD/JPY slid 0.34% to 100.93, while USD/CHF was little changed at 0.9743.

Earlier Monday, preliminary data showed that Japan’s gross domestic product was flat in the second quarter, disappointing expectations for a 0.7% rise and after an upwardly revised growth rate of 2.0% in the three months to March.

Year-on-year, Japan’s economy grew 0.2% in the last quarter, compared to expectations for 0.7%.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.31% at 0.7670 and with NZD/USD adding 0.12% to 0.7211.

Elsewhere, USD/CAD slipped 0.10% to 1.2939, re-approaching Friday’s one-month trough of 1.2920.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.09% at 95.59, not far from Friday’s one-and-a-half week low of 95.19.

Source by Investing.com

Dollar dips as retail sales data stokes growth concerns

Forex

The U.S. dollar weakened on Friday after U.S. retail sales were unexpectedly flat in July, while producer prices also fell in the same month, contrary to expectations, raising concerns about the strength of third-quarter economic growth.

Economists had forecast overall retail sales to rise 0.4 percent. The drop in producer prices, meanwhile, was the first since March and the largest since September 2015.

“The U.S. retail sales data in particular is causing the dollar to weaken,” said Nick Bennenbroek, head of currency strategy at Wells Fargo (NYSE:WFC) Securities in New York, adding that "producer prices are also signaling limited inflation."

A third report on Friday showed consumer sentiment stable in early August, though households' views on income softened a bit. A fourth report showed businesses made significant progress in June in reducing an inventory overhang that has weighed on economic growth since the second quarter of 2015.

The dollar fell 0.15 percent against a basket of six major currencies to 95.725, after falling as low as 95.254, the lowest in a week. The greenback also tumbled 0.77 percent against the yen to 101.19 yen and 0.20 percent against the euro to $1.1159.

The dollar had rallied last Friday on data showing employers added more jobs than expected in July, raising expectations the Federal Reserve will raise U.S. interest rates this year.

It gave up those gains this week, however, as investors see a rate hike in September as a long shot and with the Fed’s December meeting still far away.

The Fed will release minutes from its July meeting next Wednesday, with the focus then likely to turn to Chair Janet Yellen’s speech at the Fed’s Jackson Hole symposium on Aug. 26.

Antipodean currencies ended lower after briefly turning positive on the U.S. data. They fell overnight after data showed China’s economic activity slowed in July, with investment growing at its slowest pace since the turn of the century.

The weaker-than-expected Chinese data covered investment, lending, retail spending and factory output.

The Australian dollar fell 0.65 percent against the greenback to $0.7645. The New Zealand dollar dropped 0.18 percent to $0.7189.

The kiwi and Australian dollar were buoyed earlier this week by investors reaching for yields as European and Japanese bond yields offer, in many cases, negative returns.

Source by Reuters