News Column

Dollar Stays At Highest In 9 Months Ahead Of ECB Policy Vote

August 6, 2014

WASHINGTON (Alliance News) - The dollar held near its highest in nine months versus the euro on Wednesday as downbeat Germany and Italian economic data raised expectations for stimulus from the European Central Bank.

The ECB is seen keeping interest rates on hold Thursday, but will likely signal a willingness to inject cash into the system in the coming months in order to combat deflation.

The buck rose to USD1.3340 versus the euro before leveling off. Traders reacted to news that Italy slid into recession for the third time since 2008 in the second quarter.

Meanwhile, German manufacturing orders unexpectedly fell 3.2% in June from May.

The buck inched up to USD1.6844 versus the sterling ahead of tomorrow's Bank of England policy announcement.

Encouraging economic news from the UK has generated talk of an interest rate hike from the BoE.

The dollar slipped to Y102 versus the yen, sliding to the middle of a stubborn trading range.

The Commerce Department released a report on Wednesday showing that the US trade deficit unexpectedly narrowed in the month of June. The report said the US trade deficit narrowed to USD41.5 billion.

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Source: Alliance News

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