U.S. Dollar Weakens Against Majors
22 April 2015 - 09:46PM
RTTF2
The U.S. dollar declined against the other major currencies in
European deals on Wednesday, as investors pushed back expectations
for the Federal Reserve rate hike to later this year, after recent
string of weak data showed a slowdown in the first quarter.
Early this week, New York Fed President William Dudley said that
the timing of Fed's normalization was unclear as it continued to be
dependent on economic performance. Although the US economy has
further to reach the Fed's dual mandate of full employment and 2
percent inflation, the data would 'hopefully' support a rate hike
later this year, Dudley told at the Bloomberg Americas Monetary
Summit.
The policy makers had already ruled out a rate hike at next
week's meeting of the Federal Open Market Committee, April 28-29.
Even though a move in June is seen possible, weak reading on March
job growth, factory data and retail sales have lead to a shift in
rate hike expectations.
The greenback was down in the previous session, after exhibiting
mixed performance on Tuesday. The greenback broadly advanced
against the pound, yen and the franc but was lower against the euro
yesterday.
The greenback declined to a 5-week low of 1.5073 against pound,
from a high of 1.4913 hit at 8:30 pm ET. The next possible support
for the greenback may be located around the 1.52 zone.
The Bank of England's nine-member rate-setting body in April
once again decided unanimously to leave the interest rate and the
size of asset purchases unchanged as policymakers took note of a
strengthening in the euro area economic activity and the prospect
of UK inflation turning negative in coming months.
"All Committee members agreed that it was appropriate to leave
the stance of monetary policy unchanged at this meeting, although
two members regarded this month's decision as finely balanced," the
minutes of the April 8-9 meeting showed.
The greenback fell to 1.0800 against the euro, its weakest since
April 20, off early high of 1.0715. The greenback is likely to
challenge support around the 1.10 mark.
Reversing from an early high of 0.9560 against the franc, the
greenback slipped to a 2-day low of 0.9500. If the greenback
extends slide, it is likely to find support around the 0.94
area.
The greenback eased to 119.34 against the yen, after having
advanced to 119.77 in Asian deals. On the downside, the greenback
may possibly find support around the 118.00 mark.
The greenback also slipped to a 5-day low of 0.7736 against the
kiwi, 2-day lows of 1.2210 against the loonie and 0.7806 against
the aussie, from its previous highs of 0.7657, 1.2286 and 0.7704,
respectively. Further downtrend may lead the greenback to support
levels of around 0.80 against the kiwi, 1.20 against the loonie and
0.80 against the aussie.
Looking ahead, U.S. house price index for April, existing home
sales for March and Eurozone consumer confidence index for April
are slated for release in the New York session.
At 1:00 pm ET, German Bundesbank board member Andreas Dombret is
expected to speak on the current situation in the euro area in New
York.
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