The U.S. dollar continued to be strong against the other major currencies in the Asian session on Monday, as upbeat U.S. economic reports released on Friday raised expectations that the Fed would its interest rate soon. The plunge in the commodity prices also supported the currency.
Data Labor Department on Friday showed that U.S. consumer prices rose in line with economist estimates in the month of June. The consumer price index climbed by 0.3 percent in June following a 0.4 percent increase in May. The continued increase in prices matched economist estimates.
The Commerce Department showed significant increases in both housing starts and building permits in the month of June. The report said housing starts jumped 9.8 percent to an annual rate of 1.174 million in June from the revised May estimate of 1.069 million.
Economists had expected housing starts to climb to a rate of 1.125 million from the 1.036 million originally reported for the previous month.
Building permits, an indicator of future housing demand, surged up 7.4 percent to an annual rate of 1.343 million in June from the revised May rate of 1.125 million. Economists had expected building permits to rise to an annual rate of 1.178 million from the 1.275 million originally reported for the previous month.
In a testimony to the US Congress last week, the Federal Reserve Chair Janet Yellen reiterated that an interest rate increase is likely this year.
Gold has collapsed to the lowest levels since March 2010, due to lack of global inflation, dropping 3.9 percent to $1,089.80 an ounce.
Meanwhile, crude oil prices also fell. Crude oil for August delivery are currently down $0.09 to $50.80 a barrel. The weakness was due to fears of a supply glut, with Iran set to flood global markets.
Greece revamped its government in an attempt to enforce conditions attached to third debt bailout.
German lawmakers on Friday voted in favor of starting negotiations on a new bailout deal for Greece, a crucial test of support for the deal after the ECB raised its emergency funding for Greek banks and Eurozone countries agreed to a crucial short-term funding.
The Greece banks would reopen Monday, following their three-week shutdown.
last Friday, the U.S. dollar rose 0.38 percent against the euro, 0.03 percent against the pound, 0.36 percent against the franc and 0.04 percent against the yen.
In the Asian trading now, the U.S. dollar rose to a 6-year high of 0.7327 against the Australian dollar, a 3-month high of 0.9631 against the Swiss franc and nearly a 2-month high of 1.0819 against the euro, from Friday’s closing quotes of 0.7368, 0.9607 and 1.0827, respectively. If the greenback extends its uptrend, it is likely to find resistance around 0.72 against the aussie, 0.97 against the franc and 1.06 against the euro.
The greenback advanced to 1.5582 against the pound and 124.18 against the yen, from last week’s closing quotes of 1.5597 and 124.04, respectively. The greenback may test resistance near 1.52 against the pound and 126.00 against the yen.
Against the Canadian dollar, the greenback edged up to 1.2998 from Friday’s closing quote of 1.2968. On the upside, 1.30 is seen as the next resistance level for the greenback.
Looking ahead, Eurozone current account data for May is set to be published in the European session.
In the New York session, Canada wholesale trade sales data for May is slated for release.
At 2:30 pm ET, U.S. Treasury Secretary Jack Lew is expected to speak about the importance of financial reforms at the Better Markets’ event in Washington DC.
The market in Japan is closed in observance of Marine Day holiday.
The material has been provided by InstaForex Company – www.instaforex.com