The U.S. dollar declined against most major currencies in European deals on Thursday, as the demand for safe-haven assets improved following the Greek Parliamentary approval for a second set of reforms, which is a precondition to begin negotiations for a third bailout worth upto to EUR 86 billion.
The European Central Bank has reportedly provided a new vital cash injection to Greece’s liquidity-starved banks on Wednesday, the second such cash injection in just under a week, hours before the vote in Parliament to support the reforms demanded by the country’s international creditors.
Greece aims to wrap up the bailout talks before Aug. 20 when Greece owes the European Central Bank a loan repayment.
Traders await weekly jobless claims, due later in the day, for more clues about the labour market. Economists expect the jobless claims to dip slightly to 280,000 in the week ended July 18 from 281,000 in the previous week.
The dollar was higher during Wednesday’s New York session, as a surge in U.S. existing home sales in June reinforced expectations that the Federal Reserve would hike rates soon.
Data from the National Association of Realtors showed that existing home sales climbed 3.2 percent to an annual rate of 5.49 million in June, reaching their highest level in over eight years.
The greenback pared gains to 123.67 against the Japanese yen, from a high of 124.14 hit at 8:00 pm ET. The greenback is likely to challenge support around the 122.00 mark.
Data from the Ministry of Finance showed that Japan had a merchandise trade deficit of 69.0 billion yen in June.
That missed forecasts for a surplus of 45.8 billion following the downwardly revised 217.2 billion yen deficit in May.
The greenback dropped to a weekly low of 0.9526 against the franc and an 8-day low of 1.1005 against the euro, reversing from early highs of 0.9603 and 1.0922, respectively. If the greenback extends slide, it may challenge support around 0.94 against the franc and 1.115 against the euro.
The greenback slipped to an 8-day low of 0.6694 against the kiwi, compared to 0.6636 hit at yesterday’s New York session close. The greenback is seen finding support around the 0.675 area.
The Reserve Bank of New Zealand reduced its Official Cash Rate by 25 basis points, to 3.00 percent from 3.25 percent.
That was in line with expectations and marked the second straight month with a rate cut.
The greenback was trading at 1.2969 against the loonie and 0.7414 against the aussie, off early high of 1.3048 and an 2-day high of 0.7357, respectively. On the upside, 1.28 and 0.75 are seen as the next support levels for the greenback against the loonie and the aussie, respectively.
Although the greenback fell to a 6-day low of 1.5671 versus the pound at 3:30 am ET, it reversed in a short while as the latter faced selling pressure after retail sales data. The pair ended yesterday’s trading at 1.5612.
Data from the Office for National Statistics showed that U.K. retail sales declined unexpectedly in June.
Including automotive fuel, retail sales declined 0.2 percent from prior month, reversing a 0.3 percent rise in May. This was the first drop in three months. Sales were expected to grow 0.4 percent.
Looking ahead, U.S. leading indicators for June, Canada retail sales data for May and Eurozone flash consumer sentiment index for July are due to be released in the New York session.
At 10:15 am ET, German Bundesbank President Jens Weidmann is expected to speak about financial market integration from a central bank perspective in Frankfurt.
The material has been provided by InstaForex Company – www.instaforex.com