The dollar is down again Monday afternoon, but is attempting to put a halt to the sharp pull back that began on Wednesday of last week. The decline began following the release of the minutes of the most recent meeting of the Federal Reserve, which suggested that the central bank is moving closer to raising interest rates.
There was no U.S. economic news to drive the direction of trade today and there was little to no global economic news either. Today’s headlines have been dominated by the huge global sell-off in equity markets, due to concerns over the slowdown in China.
Investors can look forward to a number of important economic reports later this week. Consumer confidence is slated to be released tomorrow, as well as reading on new home sales and the S&P Case-Shiller HPI. Durable goods orders will be released on Wednesday and GDP is due on Thursday. Readings on personal income & consumer spending are slated for Friday, as well as consumer sentiment.
The dollar plunged to a 7-month low of $1.1711 against the Euro Monday morning, but has since bounced back to around $1.1565.
The buck dropped to a 2-month low of $1.58 against the pound sterling this morning, but is now attempting to hold its ground around $1.5765.
The U.K. economy is expected to grow at a faster pace this year as household spending and productivity growth pick up. The Confederation of British Industry forecast 2.6 percent growth this year, up from the prior estimate of 2.4 percent. Similarly, the outlook for 2016 was raised to 2.8 percent from 2.5 percent.
Bank of Japan would not be held responsible for not achieving 2 percent inflation, Prime Minister Shinzo Abe said in parliament on Monday.
“I understand the Bank of Japan’s explanation that it has become difficult to achieve the 2% price target,” Abe said.
The bank aims to achieve its 2 percent inflation target by September next year. However, renewed fall in oil prices weigh on inflation.
The greenback sank to a 7-month low of Y115.897 against the Japanese Yen this morning, but has since rebounded to around Y118.865.
The leading index for Japan, which measures the future economic activity, rose less than initially estimated in June, final figures from the Cabinet Office showed Monday.
The leading index was revised downward to 106.5 in June from the preliminary estimate of 107.2. In May, the score was 106.0.
The latest reading was the highest since March 2014, when it marked the same 106.5.
The material has been provided by InstaForex Company – www.instaforex.com