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COVERFOREXNEWSLETTER

Dollar Slumps Against Major Peers

Dollar

The dollar, on Friday, July 28, plunged against its major peer. The dollar index against a basket of six major currencies was a shade lower at 93.826 after edging up 0.2 percent the previous day.

The greenback, which had sunk to a 13-month low midweek after the Federal Reserve’s policy statement suggested it was in no hurry to raise interest rates again, received a lift on Thursday as Treasury yields rose on the back of upbeat U.S. durable goods and trade data.

Market focus was now on second quarter U.S. gross domestic product data due at 1230 GMT.

Economists expect the world’s largest economy to have grown around 2.6 percent in the second quarter, from 1.4 percent in the first quarter. A solid outcome will no doubt give the beleaguered dollar some respite from the recent sell-off.

Dollar bulls have not had much to cheer about recently, hobbled by investigations into U.S. President Donald Trump administration’s ties to Russia and the reduced likelihood of tax reform and infrastructure spending being enacted soon.

“The dollar’s fall after the Fed meeting looked overdone, so it was natural for it to rebound,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

“And the dollar could find more bids if U.S. economic data turns out to be strong. That said, we are unlikely to see a return to the days when the dollar was the lone winner, because other countries are joining the Fed in trying to normalise monetary policies.”

The common currency was last up 0.1 percent at $1.1686 . It had fallen about 0.5 percent overnight, when it was knocked off a 2-1/2-year high of $1.1777. The euro was on track to rise 0.2 percent on the week, Reuters reports

The Swiss franc extended its slide against the buoyant euro, touching 1.1364 francs per euro. It was the franc’s weakest since January 2015, when the Swiss National Bank (SNB) removed its cap on the currency.

The dollar was down 0.2 percent at 111.070 yen to reverse the previous day’s modest gains. It was poised to lose 1.2 percent this week, during which it fell to a six-week low of 110.625.

The Australian dollar was 0.1 percent higher at $0.7975 .

 

 

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