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US Dollar little Changed vs Rivals

In today’s fundamental analysis: the economic calendar is light for today with (Economic and Monetary Union) EMU consumer inflation, US housing starts and permits and the University of Michigan sentiment indicator coming out.

Fundamental Analysis

  • On Friday morning, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 97.44, close to Thursday’s two-week high of 97.56.
  • Asian stock markets traded in positive territory (with the exception of Chinese equities which may have suffered under the weaker yuan), despite modest losses on Wall Street yesterday
  • EUR/USD dropped further to the 1.1150 area, even as interest rate differentials narrowed against the dollar. USD/JPY also rebounded despite a correction in equities. EUR/USD finished the session at 1.1145 but now trades at 1.1180. USD/JPY closed the day at 110.93.
  • Gold prices edged higher on Friday but were still hovering near a three-week trough as the greenback remained broadly supported after recent upbeat U.S. data and the Federal Reserve’s decision to raise interest rates.
  • Yesterday, the BoE kept its policy unchanged as expected. However, only five members supported the majority view. Three members unexpectedly voted in favor of a rate hike as the BOE expects inflation to move beyond 3%. GBPUSD jumped from 1.27 to just below 1.28, but eased again later as the dollar was also well bid. The pair finished the session at 1.2758.

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