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.
- 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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