The dollar weakened further against its peers today overlooking favorable US durable goods data as the greenback was still pressured leading up to the latest policy statement due from the Federal Reserve this week. US durable goods orders rose by 3.4% in June surpassing forecasts for a 3.0% increase following an amended decline of 2.1% in May. The market remained focused on Wednesday’s statement from the Fed for indications on when its key interest rate will be increased. The US dollar index was down 0.78% trading at 96.58 which is its lowest level in 2 weeks.
The euro strengthened against the dollar with the pair surging 1.01% trading at a 2 week high of 1.1095 following the release of data by the Ifo research institute revealing that its business climate index climbed from a reading of 107.5 in June to 108.0 in July beating forecasts of a drop to 107.2. The euro strengthened further reaching a session high of 1.1129. Negotiations between Greece and its creditors regarding its new bailout scheme were scheduled to kick off today after a delayed start on Friday. Greece owes the European Central Bank over 3 billion euros which must be paid by August 20 by which time a new bailout agreement must be attained.
The pound strengthened against the dollar with the pair gaining 0.34% trading at 1.5571. The pair had come off its session low of 1.5490 and has since reached a session high of 1.5594. With the pound having reached its highest level since 2008 earlier in July, UK manufacturers are taking a hit with order books at 2 year lows blaming the pound’s strength. The UK is set to release its GDP report tomorrow which could influence rate hike expectations in the UK and the US.
The yen strengthened against the dollar with the pair declining 0.50% trading at 123.18. The pair had come off its session high of 123.83 to reach a low of 123.01. The yen had overlooked a lower than forecast gain in Japan’s corporate services index which saw a 0.4% increase while experts expected a 0.6% gain on a year-over-year basis for June.
The Australian, New Zealand and Canadian dollars strengthened against the dollar. The Aussie gained 0.27% against the dollar with the pair trading at 0.7300 coming off its 6 year low. The Aussie’s advances were curtailed as poor Chinese factory data released on Friday continued to put pressure on currencies associated with commodities. The kiwi rose 0.76% against the dollar with the pair trading at 0.6625 as the kiwi was stronger against the Aussie. The loonie gained 0.18% against the greenback with the pair trading at 1.3024 as the greenback was pressured in anticipation of the Fed’s statement.
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