News Column

U.S Dollar Rises Against Majors

July 6, 2014

CANBERA (Alliance News) - The US dollar strengthened against the other major currencies in the Asian session on Monday amid speculation that a strengthening labour market in the US would prompt the Federal Reserve to raise interest rates sooner-than-forecast.

A Labor Department report on Thursday showed an addition of 288,000 jobs in June, notably higher than an expected addition of 211,000 jobs. Meanwhile, the jobless rate fell to a near six-year low of 6.1%.

The private sector employment report on Wednesday was also robust, with data showing an increase of 281,000 jobs in June, up from 217,000 jobs in May.

The traders now focus on the minutes of Federal Reserve's June 17-18 meeting due to be released on Wednesday. At the meeting, the Fed kept monetary policy on hold, while slashing its 2014 growth forecast for the US economy.

The US dollar rose to nearly 2-week highs of 1.3579 against the euro and 0.8950 against the Swiss franc, from early lows of 1.3595 and 0.8930, respectively. The next possible upside target for the US dollar is seen at 1.34 against the euro and 0.90 against the Swiss franc.

Against the NZ dollar, the greenback climbed to nearly a 2-week high of 0.8712 from an early low of 0.8747. The pair closed Friday's deals at 0.8734 against the kiwi. If the greenback extends its uptrend, it is likely to find resistance around the 0.86 area.

Data from Quotable Value showed that New Zealand house prices rose at a faster rate in June. Property prices rose 2.1% sequentially in the three months ended June following the 0.7% increase in the three months ended May.

Moving away from early lows of 1.7166 against the pound and 102.19 against the yen, the greenback advanced to 1.7135 and 102.02, respectively. On the upside, 1.70 against the pound and 102.80 against the yen are seen as the next resistance level for the greenback.

The US dollar which ended last week's deals at 1.0650 against the loonie strengthened to a 4-day high of 1.6629. On the upside, 1.07 is seen as next resistance level for the greenback.

Against the Australian dollar, the US dollar rose to a 4-day high of 0.9340 from an early low of 0.9363. The pair was quoted at 0.9362 at last week's close. The greenback may test resistance near the 0.92 zone.

Looking ahead, Japan preliminary leading index for May is due shortly.

Swiss unemployment rate for June is due at 1:45 am ET.

In the European session, German industrial production for May and Eurozone Sentix investor confidence index for July are set to be released.

Canada building permits for May and Ivey purchasing managers index for June are due to be released in the New York session.

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Source: Alliance News

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