News Column

US Dollar Slips Against Majors

June 26, 2014

CANBERA (Alliance News) - The US dollar declined against the other major currencies on Friday, as yesterday's soft data on US jobless claims and personal spending raised concerns over US economic growth.

These data came on the heels of disappointing US GDP data on Wednesday, which showed a sharper contraction of 2.9% in the first quarter.

The Commerce Department said that US spending edged up by 0.2% in May after coming in unchanged in April. Economists had expected spending to increase by 0.4%.

The US initial jobless claims came in at 312,000 in the week ended June 21, slightly up from expectations for 310,000 claims, a Labor Department report showed. The previous week's figures were revised up to 314,000.

Inflation looks likely to rise back to 2% later this year, allowing the Fed to hike interest rates by the end of the first quarter 2015, St. Louis Fed President James Bullard said in an interview on the Fox Business Network on Thursday.

Bullard added that the nation's economic growth is strong enough to withstand the effect of interest rate hike and the Fed is moving closer to its goals than the markets realize.

The greenback declined to 101.31 against the yen, a level not seen since May 21. The next downside target for the greenback-yen pair lies around the 100.00 zone. At yesterday's close, the pair was worth 101.71.

The greenback that closed Thursday's trading at 0.8935 against the franc slipped to a 2-day low of 0.8918. If the greenback-franc pair extends its slide, 0.885 is seen as next possible downside target level.

The greenback hit a 1-week low of 1.7051 against the pound, compared to 1.7023 hit late New York Thursday. The greenback may possibly find downside target around the 1.715 zone.

The greenback ticked down to 1.3628 against the euro, compared to yesterday's closing quote of 1.3609. Further weakness may take the greenback to a support around the 1.37 region.

The greenback dipped to 1.0677 against the loonie, a level not seen since January 6. The greenback is likely to find support around the 1.06 mark. The pair was worth 1.0687 at yesterday's close.

The greenback slipped to 0.9440 against the aussie, setting a 4-day low, which may be compared to yesterday's closing value of 0.9412. An extension of decline may lead the greenback to a support at the 0.95 mark.

Looking ahead, UK GDP and current account data for the first quarter and Eurozone economic sentiment index for June are due shortly.

German preliminary CPI for June is to be released at 8:00 am ET.

The Reuters/University of Michigan's final consumer sentiment index for June and Canada's industrial product price index for May are set for release in the New York session.

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Source: Alliance News

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