The U.S. dollar continued to be strong against the other major currencies in the Asian session on Tuesday, amid renewed speculation that the U.S. Federal Reserve may tighten its monetary policy in the wake of the Greek debt deal.
After hours of negotiations, Greece and its creditors reached a conditional agreement for a third bailout program that consists of several tough austerity measures. European Council President Donald Tusk said the agreement comes with strict conditions but places Greece on a path of growth and helps regain trust.
However, the news generated skepticism among some analysts as there are intricacies and complexities involved in it. Eurozone ministers have given Greece until Wednesday to pass new laws, including tax and pension reforms, to help avoid losing access to the common currency bloc.
Greece needs EUR 7 billion by July 20 and an extra EUR 5 billion by August.
Last Friday, Fed Chair Janet Yellen said that the central bank was on track to raise interest rates at some point this year.
Traders await Yellen’s semi-annual congressional testimony this week for any further indications on the timing of an initial rate hike. Yellen will appear before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.
Monday, the U.S. dollar rose 1.42 percent against the euro, 0.12 percent against the Swiss franc and 0.52 percent against the yen.
In the Asian trading today, the U.S. dollar rose to a 1-week high of 1.0972 against the euro and a 4-day high of 1.5472 against the pound, from yesterday’s closing quotes of 1.0995 and 1.5485, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.07 against the euro and 1.51 against the pound.
Against the Swiss franc and the yen, the greenback advanced to more than a 1-1/2-month high of 0.9531 and nearly a 3-week high of 123.72 from yesterday’s closing quotes of 0.9499 and 123.43, respectively. The greenback may test resistance near 0.96 against the franc and 126.00 against the yen.
Looking ahead, final German CPI for June is due to be released at 2:00 am ET.
Swiss PPI for June, U.K. consumer price and producer price indices for June, along with house price index for May, Eurozone industrial production for May and the German ZEW economic sentiment index for July are also slated for release.
In the New York session, U.S. retail sales data, import price index and U.S. NFIB small business index, all for June and U.S. business inventories for May are set to be published.
The material has been provided by InstaForex Company – www.instaforex.com