U.S. Dollar Strengthens On Fed Rate Hike Expectations
13 Juillet 2018 - 09:01AM
RTTF2
The U.S. dollar advanced against its major counterparts in the
early European session on Friday, as an overnight data showing an
acceleration in annual rate of consumer price growth raised hopes
that the Federal Reserve may raise interest rates twice more this
year.
Data from the Labor Department showed that the consumer
inflation improved to more than a six-year high of 2.9 percent
annually in June from 2.8 percent in May.
Core consumer price growth also edged up to 2.3 percent in June
from 2.2 percent in May, reaching the highest level since January
of 2017.
The data boosted the likelihood of aggressive rate hikes by the
Federal Reserve.
European shares were higher, following positive cues from Asia,
as concerns over an escalating US-China trade spat eased.
China's trade grew by double digits in June despite mounting
tensions with Washington, official data showed.
Exports climbed 11.3 percent year-over-year in dollar terms in
June, faster than the expected rise of 9.5 percent. Imports
advanced 14.1 percent from a year ago, well below economists'
forecast for a growth of 21.3 percent.
The currency has been trading in a positive territory against
its major rivals in the Asian session, with the exception of the
franc.
The greenback spiked up to 1.0046 against the franc, its
strongest since May 15. The greenback is seen finding resistance
around the 1.02 level.
The greenback that ended Thursday's trading at 112.53 against
the yen strengthened to more than a 5-month high of 112.80. The
greenback is likely to find resistance around the 114.00 level.
The greenback strengthened to 11-day highs of 1.1613 against the
euro and 1.3103 against the pound, from its early lows of 1.1675
and 1.3206, respectively. The next possible resistance for the
greenback is seen around 1.15 against the euro and 1.29 against the
pound.
The greenback edged up to 1.3202 against the loonie and 0.7368
against the aussie, off its early low of 1.3152 and 2-day low of
0.7422, respectively. If the greenback continues its rise, 1.33 and
0.72 are possibly seen as its next resistance levels against the
loonie and the aussie, respectively.
The greenback climbed to a 10-day high of 0.6725 against the
kiwi, from a 2-day low of 0.6787 seen at 9:30 pm ET. On the upside,
1.33 is possibly seen as the next resistance level for the
greenback.
Looking ahead, U.S. export and import prices and University of
Michigan's preliminary consumer sentiment index, as well as Canada
existing home sales, all for June, are due in the New York
session.
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