The dollar is gaining ground against all of its major rivals at the start of the new trading week. Investors remain risk averse following the unexpected U.K. referendum result at the end of the prior week, in favor of a U.K. exit from the Eurozone. The shock from the announcement has yet to wear off and the move has plagued investors with uncertainty. This has force many to flee to safe havens like gold, the Japanese Yen and the dollar.
Many investors remained on the sidelines Monday, due to a lack of U.S. economic data. Traders can look forward to the release of GDP and consumer confidence data tomorrow, as well as personal income and pending home sales on Wednesday. Weekly jobless claims and Chicago PMI are slated for Thursday, while ISM manufacturing data is scheduled for Friday.
Federal Reserve Chair Janet Yellen has pulled out of a central bank conference organized by the European Central Bank. Yellen had been scheduled to speak on a panel with Bank of England Governor Mark Carney and ECB President Mario Draghi on Wednesday.
The dollar slipped to an early low of $1.1083 against the Euro Monday, but has since climbed to around $1.1015.
Eurozone money supply growth accelerated in May and the annual increase in loans to households improved, the European Central Bank said Monday. The broad monetary aggregate M3 increased by faster-than-expected 4.9 percent on a yearly basis, following a 4.6 percent increase seen in April. It was expected to rise to 4.8 percent.
The U.K. economy is strong enough to face the future but needs to adjust to the new situation, Chancellor of the Exchequer George Osborne said Monday in a bid to calm financial markets that have been roiled by the country’s decision to leave the European Union in the June 23rd referendum.
“Britain is ready to confront what the future holds for us from a position of strength,” Osborne said in his first public remarks since Britons voted to leave the EU.
Osborne had campaigned for the U.K. to remain in the EU, just like Prime Minister David Cameron, who announced his resignation on Friday after the referendum results.
“I said we had to fix the roof so that we were prepared for whatever the future held. Thank goodness we did,” Osborne said. “Our economy is about as strong as it could be to confront the challenge our country now faces.”
That said, the “Brexit” will have an impact on the economy and public finances – and there will need to be action to address that, he said.
The buck rose to its highest level against the pound sterling in over 3 decades on Friday and has advanced further on Monday, to around $1.3195. Before the U.K. referendum result was announced late last Thursday, the dollar was trading around the $1.5000 level.
The greenback has risen to around Y101.885 against the Japanese Yen this afternoon, from an early low of Y101.358.
The material has been provided by InstaForex Company – www.instaforex.com