US Dollar Spikes Up Against Majors
Canbera-Australia (Sept 21) The US dollar firmed against its major opponents in European deals on Monday, as investors mulled the possibility of a Fed rate hike later this year, on the back of comments by Fed policy makers.
Speaking at a weekend conference on the China-US financial system, San Francisco Fed President John Williams told that the next appropriate step is a gradual rate, likely starting sometime later this year, given continued growth in economic and labor market.
Global developments "definitely present significant challenges and risks, but overall I am quite positive about the outlook for the US economy," he said.
St. Louis Fed President James Bullard acknowledged that he argued in favour of a rate increase at the September meeting. The FOMC's goals have "essentially been met, but the Committee's policy settings remain stuck in emergency mode," Bullard told Community Bankers Association of Illinois over the weekend.
The currency was also underpinned by the monetary policy divergence of the Fed, compared to other major central banks such as European Central Bank and the Bank of Japan .
The ECB policy makers has been assuring about their willingness to modify its asset purchases should economic turbulence merit action.
Traders now focus on US existing home sales for August, house price index for July, weekly jobless claims, durable goods orders for August, final gross domestic product data for second quarter and University of Michigan's final consumer sentiment index for September due this week for direction.
The greenback showed mixed performance in the Asian session. While the greenback climbed against the franc and the yen, it was steady against the euro. Against the Sterling, the dollar trended lower.
The greenback advanced to a 4-day high of 1.5505 against the pound, reversing from an early low of 1.5568. At last week's close, the pair was quoted at 1.5523. The next possible resistance for the greenback may be located around the 1.54 region.
The greenback recovered to 1.1274 against the euro and 120.39 against the yen, from its prior lows of 1.1330 and 119.73, respectively. The greenback finished Friday's trading at 1.1295 against the euro and 119.95 against the yen. On the upside, the greenback is likely to find resistance around 1.11 against the euro and 121.00 against the yen.
The greenback, having fallen to 0.9643 against the franc at 4:20 am ET , bounced off to 0.9677. The greenback is seen finding resistance around the 0.975 area.
The greenback that ended last week's deals at 0.7182 against the aussie strengthened to a 4-day high of 0.7156. Further uptrend may take the greenback to a resistance around the 0.70 level.
The greenback rallied to 0.6337 against the NZ dollar, from a low of 0.6400 hit at 7:00 pm ET . The kiwi-greenback pair was valued at 0.6388 when it ended Friday's trading. The greenback is poised to find resistance around the 0.62 mark.
Looking ahead, Canada wholesale sales data for July and US existing home sales for August are due in the New York session.
Atlanta Federal Reserve Bank President Dennis Lockhart is due to speak in Atlanta at 1 pm ET .
Source: Alliancenews
