News Column

Dollar At Fresh 8-month High Versus Euro As US Durable Goods Orders Rebound

July 25, 2014



CANBERA (Alliance News) - The US dollar extended early rally, touching a multi-month high against the euro, in New York deals on Friday as the nation's durable goods orders grew more-than-expected in June, adding to optimism over strength of the economy.

Data from the Commerce Department showed that US durable goods orders increased by 0.7% in June following a 1.0% decrease in May. Economists had been expecting orders to climb by about 0.5%.

Excluding orders for transportation equipment, durable goods orders rose by a slightly stronger 0.8% in June compared to a 0.1% drop in the previous month.

The greenback got a boost yesterday, as US jobless claims fell to an 8-1/2-year low of 284,000 in the week ended July 19. The figures were also down from the 308,000 claims forecast by economists.

Traders await the US gross domestic product data and jobs data, along with the Federal Reserve's monetary policy announcement next week for further clues about the economy.

The US interest rates may rise sooner than forecast "if the labor market continues to improve more quickly than anticipated," Federal Reserve Chair Janet Yellen said at the semi-annual testimony before the Congressional committee last week.

The greenback held firm near an early new 4-week high of 1.6960 against the pound, after having fallen to 1.6997 in early deals. The pound-greenback pair finished yesterday's trading at 1.6985. The greenback is likely to find resistance around the 1.69 region.

The UK economy expanded as expected in the second quarter underpinned by services and manufacturing, preliminary data from the Office for National Statistics showed.

Gross domestic product grew 0.8% sequentially in the second quarter, the same rate as seen in the first three months of the year.

The greenback was steady against the yen, with pair trading at 101.85, after approaching more than a 2-week high of 101.93 at 4:35 am ET. If the greenback advances further, it may find resistance around the 102.5 zone. At Thursday's close, the pair was valued at 101.79.

Japan's consumer prices rose 3.6% on year in June, the Ministry of Internal Affairs and Communications said. That topped forecasts for 3.5%, also slowing from 3.7% in May.

The greenback added 0.3% to hit near a 6-month high of 0.9046 versus the franc, from an early low of 0.9017. The next possible upside target for the greenback is seen around the 0.91 level. At yesterday's close, the pair was quoted at 0.9023.

The greenback rallied to more than an 8-month high of 1.3431 against the euro, rebounding from an early low of 1.3475. The pair was valued at 1.3462 when it ended deals yesterday. On the upside, 1.34 is seen as the next possible resistance level for the greenback.

Germany's business confidence declined for a third successive month in July and at a faster-than-expected pace, the survey results from the Ifo Institute showed.

The Ifo Business Climate Index fell to 108, which was worse than the 109.4 score forecast by economists. In June, the index had eased to a six-month low of 109.7.

The greenback rose by 0.3% to hit a 9-day high of 1.0768 against the Canadian dollar, from a low of 1.0737 hit 2:45 am ET. Further gains may take the greenback to a resistance around the 1.08 zone. The pair closed Thursday's deals at 1.0743.

The greenback drifted up to a 1-1/2-month high of 0.8538 against the NZ dollar and a 2-day high of 0.9399 against the aussie, reversing from its previous lows of 0.8585 and 0.9423,respectively. The next key resistance levels for the greenback may likely be found around 0.935 against the aussie and 0.85 against the kiwi.



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Source: Alliance News


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