Dollar rises as the market waits for guidance from the US Federal Reserve

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  • US service industry growth slowed in June
  • Disappointing German indicators
  • Sterling declines from 1 week high

NEW YORK, Jul 6 (Reuters) – The dollar was up against a basket of peer currencies on Tuesday after the long Independence Day weekend as traders positioned themselves ahead of the release of minutes of the crucial June meeting .

Market participants will look for clues as to when the Fed will stop buying pandemic bonds as the economic recovery accelerates when the minutes of the June meeting are released on Wednesday. Continue reading

“Investors have been preparing for potentially hawkish turns since these minutes, and that should give the dollar some upside here,” said Edward Moya, a senior market analyst at OANDA.

At 10:45 a.m. Eastern Time, the dollar index rose 0.261% to 92.488.

The spike comes after a mixed US employment report late last week pushed the dollar down from a three-month high. Continue reading

Tuesday data showed that US service industry activity grew at a moderate pace in June, likely curbed by labor and raw material shortages, which caused unfinished work to pile up. Continue reading

Elsewhere, the euro fell to a three-month low against the dollar as disappointing data partially clouded the currency’s attractiveness.

Investor sentiment in Germany, the largest economy in the Eurozone, remains at a high level, but fell sharply in July, reported the economic research institute ZEW, while orders for goods manufactured in Germany in May recorded the sharpest slump since the first lockdown in 2020. Continue reading

The data weighed on the euro, which fell 0.33% against the greenback to $ 1.1827. It fell to an early April low of $ 1.1807 last week.

The European Central Bank’s policymakers are in the middle of debating a new strategy, with many now supporting the idea of ​​keeping inflation above 2% for a while, after having been below that level for most of the last decade.

The pound sterling fell 0.29% against the dollar to $ 1.3807 after hitting a one-week high of $ 1.3888, and markets are looking forward to England becoming the first major country officially infected with the coronavirus starts to live by dropping COVID-related restrictions in two weeks.

The New Zealand dollar lost 0.34% to $ 0.7008, undoing gains made earlier in the day as traders bet a rate hike could come as early as November after a strikingly strong poll on business conditions.

The Aussie slipped 0.16% to $ 0.75125 after rising 1.2% at times after the Reserve Bank of Australia cut bond purchases and adjusted its rate outlook to open the door to the possibility of rate hikes To open in 2024.

That decision puts the RBA in a small but growing club of central banks pulling back on massive pandemic-era incentives.

Reporting from John McCrank; additional reporting by Julien Ponthus; Adaptation by Jacqueline Wong, Mark Heinrich, William Maclean

Our Standards: The Thomson Reuters Trust Principles.



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