The dollar held considerable ground gained against its peers today on thin volume traded overlooking discouraging manufacturing output data out of New York as the greenback sustained further demand as a December rate hike by the Federal Reserve looks to be more likely. The Federal Reserve Bank of New York’s general business confidence index moved up from a reading of -11.4 in October to -10.7 in November while experts had forecast the index to move up to -6.0. The US Dollar Index gained 0.49% trading at 99.37 not far from its 7 month high of 99.60 reached last week.
The euro weakened against the dollar with the pair trading at 1.06824 off its session low of 1.06747 after having reached a session high of 1.0758 reached earlier in the day. Safe haven demand grew on the back of news of terrorist attacks in France which resulted in 130 people killed in Paris on Friday. French government retaliated by launching air strikes on Syria. The euro had already been weighed down by talk of the European Central Bank expanding its stimulus program in order to bolster euro zone price growth by year end.
The pound weakened against the dollar with the pair down roughly 0.25% trading at 1.5206 off its low of 1.5180 after having come off its high of 1.5231 reached earlier in the day. Tomorrow the UK is set to release its consumer price index data and if the rate of inflation has declined for October the pound could drop against the dollar and the other majors whereas an increase would see the pound strengthen. The pound has gone from one of the strongest to one of the weakest currencies in the G10 from last week to the week prior.
The yen weakened against the dollar with the pair up around 0.5% trading at 123.22 off its session high of 123.27 after having come off its session low of 122.22 reached earlier in the day. The yen was virtually unaffected by data which showed that Japan’s GDP shrunk at an annual rate of 0.8% for the 3rd quarter following a reduction of 1.2% in the 2nd quarter forcing Japan into a recession. The Bank of Japan is considering expanding its stimulus program as a result of the disappointing data.
The Australian, New Zealand and Canadian dollars weakened against the greenback. The Aussie declined around 0.7% against the dollar with the pair trading at 0.7095 off its session low of 0.7080 after having come off its session high of 0.7132. The kiwi dollar lost roughly 1% against the dollar with the pair trading at 0.6494 off its session low of 0.6469 after having come off its session high of 0.6547 reached earlier in the day. The loonie declined 0.32% against the dollar with the pair reaching a 1 month high of 1.3364 on the back of data which revealed that Canadian manufacturing sales dropped by 1.5% in September compounding forecasts for a 0.1% increase. The pair had come off its session low of 1.3289 reached earlier in the day.
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