The dollar weakened against its peers today trading at 3 week lows on thin volume with no significant economic data due to be released out of the US as the market furthered its profit taking following the dollar’s rally last week. The US dollar index declined 0.37% to a reading of 94.81 which was its lowest level since May 19.
The euro held its ground against the dollar with the pair trading steadily around 1.1283 coming off its high of 1.1385 set earlier in the session on the back of a selloff in European government bonds. German 10 year bund yields had climbed to a 9 month high moving the euro higher against the dollar. However outlook on the euro continued to be vulnerable as Greece continued negotiations surrounding its deal for bailout funds.
The pound strengthened against the dollar with the pair up over 1% to 2.5 week highs with a session high of 1.5553. The pound was supported following the release of data from the UK Office for National Statistics which revealed that industrial output grew 0.4% in April beating forecasts for a 0.1% gain after figures for March were amended to reflect a gain of 0.6%. Data also revealed that manufacturing output declined 0.4% in April offsetting an increase in March.
The yen strengthened against the dollar with the pair tanking roughly 1.5% down to 2 week lows and a session low of 122.45. The yen was supported by remarks from Bank of Japan Governor Kuroda who indicated that the yen is considerably week in comparison to the real effective exchange rate which evaluates the yen’s strength against the currencies of those that trade with Japan. Kuroda also stated that even if the Federal Reserve increases its key interest rate the dollar may not strengthen further against the yen as it is already priced into the market.
The Australian, New Zealand and Canadian dollars strengthened against the greenback. The Aussie and kiwi dollars gained roughly 1% with session highs of 0.7785 and 0.7232 respectively. The Westpac Banking Corporation revealed that Australian consumer sentiment declined 6.9% in June following a 6.4% rise in May. Reserve Bank of Australia Governor Stevens indicated that the central bank might lower interest rates in the coming months cautioning that greater issues for its economy could be unwantedly created by increased monetary policy. The loonie advanced to 2.5 week highs against the dollar with the pair reaching a session low of 1.2201.
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