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    U.S. Dollar Index Plunges to Five-week Lows

    The greenback plummeted to a new five-week low against its other major counterparts on Wednesday, amid declining expectations that the Fed will hike rates any time soon.

    The U.S. dollar index slipped 0.1% to 93.740, after falling as low as 93.68, posting its weakest level since the 6th of May.

    Against the Japanese yen, the dollar fell 0.25% to 107.15, after reaching a session low of 106.72 earlier. China’s better-than-expected May import figures underpinned risk appetite and helped the dollar jump off its lows against the safe-haven yen, while increasing speculation that the economy may be stabilizing, even though exports declined more than forecasted.

    The single currency inched up 0.2% to 1.1375. The pair ended the last two days flat, after the 2% soar on Friday’s U.S. nonfarm payrolls report that quashed expectations of a June rate hike. The Federal Reserve is set to hold a two-day policy meeting on the 15th of June 2016.

    The greenback was boosted overnight, following the release of revised figures on U.S. productivity and labour costs in the three months to March that underpinned the view that the labour market’s weakness is being gradually reduced.

    Elsewhere, the Aussie advanced 0.1% to 0.7462, after gaining more than 1% in the previous session, hitting a one-month high of 0.7465. The Australian dollar found support after the Reserve Bank of Australia announced its decision to leave monetary policy unchanged and that it is not in a hurry to hike rates.

    In the meantime, speculation over whether Britain will opt to remain in the E.U. at the upcoming referendum on the 23rd of June 2016 continued to drive the British pound. The cable was steady at 1.4545, after having gained 0.8% overnight, as two new polls gave a narrow lead to the ‘remain’ supporters.

    The Kiwi rose 0.3% to 0.6999, after jumping to a one-month peak of 0.7006 earlier in the session. The Reserve Bank of New Zealand is due to announce its monetary policy decision on Thursday, with investors expecting the central bank to leave its monetary policy unchanged.
     
    Market watchers’ attention is now turned to the U.K. manufacturing production report, expected to remain unchanged at 0.1%, and to the country’s industrial production report, which is seen falling to 0.0% from a previous reading of 0.3%. 

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