News Column

US Dollar Rises Ahead Of Data

July 2, 2014

CANBERA (Alliance News) - The US dollar strengthened against the other major currencies on Wednesday ahead of the release of a slew of US economic data due later in the day.

Traders keenly await Federal Reserve Chair Janet Yellen speech, the ADP private sector employment report and factory orders report for further clues on the economy.

The private sector is seen to add 205,000 jobs in June, compared to 179,000 job added in May.

Meanwhile, factory orders are expected to fall by 0.3% in May following a 0.7% increase in April.

At 11:00 am ET, Yellen will speak on the monetary policy to the IMF central banking conference in Washington.

The Labor Department will release the monthly jobs data for June on Thursday, due to the US Independence day holiday on Friday. Economists expect the unemployment rate to remain unchanged at 6.3%.

The Institute for Supply Management said yesterday that activity in the US manufacturing sector grew at a slightly slower rate in the month of June. The ISM said its manufacturing purchasing managers' index edged down to 55.3 in June from 55.4 in May, although the reading still indicated expanding manufacturing activity The US dollar rose to a 5-day high of 101.64 against the yen, from an early low of 101.50. At yesterday's close, the greenback was trading at 101.50 against the yen. If the greenback extends its uptrend, it is likely to find resistance around the 102.37 area.

The Bank of Japan said that the monetary base in Japan surged 42.6% on year in June. That follows the 45.6% spike in May.

Against the euro and the Swiss franc, the greenback rose to 2-day highs of 1.3668 and 0.8881 from early lows of 1.3681 and 0.8871, respectively. The greenback may test resistance near 1.35 against the euro and 0.89 against the franc.

Moving away from an early low of 0.8774 against the NZ dollar, the greenback advanced to a 2-day high of 0.8746. If the greenback continues its uptrend, it is likely to find resistance around the 0.86 area.

A survey by ANZ showed that the commodity prices in New Zealand fell for the fourth consecutive month in June. The ANZ commodity price index decreased 0.9% on month in June, reaching its lowest level in fifteen months. This follows the 2.2% decline in May.

The greenback which ended yesterday's deals at 1.7147 against the pound, edged up to 1.7139. If the greenback continues to rise, it may find resistance around the 1.69 region.

The US dollar advanced to 0.9449 against the Australian dollar, from an early low of 0.9497. The US dollar is likely to find resistance around the 0.93 area.

The Australian Bureau of Statistics said that Australia posted a merchandise trade deficit of AUD1.911 billion in May-marking an increase of AUD1.131 billion or 145% on the April deficit.The headline figure was well shy of forecasts for a deficit of AUD200 million following the downwardly revised AUD780 million deficit in April.

Looking ahead, the UK construction PMI for June and Eurozone PPI for May are due shortly.

At 9:00 am ET, RBA Assistant Governor Guy Debelle will deliver a speech at the Financial Times Camp Alphaville Conference in London.

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Source: Alliance News

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