News Column

US Dollar Trades Higher Against Majors

August 18, 2014

OTTAWA (Alliance News) - The US dollar traded higher against its major counterparts on Tuesday, as upbeat data on US homebuilder sentiment index for August pushed forward expectations for an early interest hike by the Federal Reserve.

Homebuilder confidence in the US rose in August to its highest level since January, according to a report released by the National Association of Home Builders on Monday.

The report said the NAHB/Wells Fargo Housing Market Index climbed to a reading of 55 in August from 53 in July. Economists had expected the index to come in unchanged compared to the previous month.

US consumer prices, to be released later in the day, may probably show an advance of 2.0% on year in July, after rising 2.1% a month earlier. Building permits are seen rebounding by 2.8% in July from June's 3.2% decline.

Traders await Federal Reserve's minutes of July 29-30 meeting, due on Wednesday, for more clues about outlook on interest rates.

The Jackson Hole Symposium, being held on August 21-23, could give more details on Fed's monetary plans. Markets are closely awaiting Fed Chair Yellen's keynote speech on Friday to gauge any shift in language on slack in the labour market or underutilisation to assess labor market recovery.

The greenback held steady against the yen, after rising to a 4-day high of 102.64 in early Asian deals. The next possible resistance for the greenback-yen pair is seen around the 103.00 zone.

Japan's leading index rose more than initially estimated in June, final data from the Cabinet Office showed.

The leading index rose to 105.9 in June, which was revised up from 105.5. That followed by a 104.8 score in May.

The greenback drifted higher to a 5-day high of 0.9071 against the Swiss franc, before holding steady thereafter. On the upside, the greenback may possibly challenge resistance around the 0.915 mark.

The greenback advanced to a session's high of 1.3352 against the euro during Asian morning deals and showed choppy trading thereafter. The greenback is likely to challenge resistance around the 1.33 mark.

The greenback recovered to 1.0897 against the loonie, after having fallen to 1.0884 at the commencement of today's trading. Next key resistance for the greenback-loonie pair may be eyed around the 1.095 level.

The greenback firmed to a 6-day high of 0.8425 against the NZ dollar in early deals and moved sideways thereafter. If the greenback extends rise, 0.835 is seen as its next possible resistance level.

New Zealand's producer prices declined in the second quarter as diary prices fell, a report from Statistics New Zealand showed.

Output producer prices, representing the prices received by producers, decreased 0.5% quarter-over-quarter in the second quarter.

The greenback rose back to 1.6712 against the Sterling, compared to Monday's closing quote of 1.6725. Further gains may take the greenback to a resistance around the zone.

Looking ahead, Eurozone current account for June, UK CPI and PPI for July and DCLG house price index for June are due in the European session.

The US CPI, housing starts and building permits - all for July are to be released in the New York session.

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Source: Alliance News

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