Reuters logo
FOREX-Dollar falls on doubts over U.S. rate hikes
June 23, 2017 / 4:19 PM / 6 months ago

FOREX-Dollar falls on doubts over U.S. rate hikes

    * Dollar index clings to slight weekly gain
    * Upbeat new home sales data offsets weaker U.S. business
    * Commodity-linked currencies rise with rebound in oil
    * Pound rises 3 straight days after BoE's Forbes' hawkish

 (Updates market action, changes dateline, previous PARIS)
    By Richard Leong
    NEW YORK, June 23 (Reuters) - The dollar fell against a
basket of major currencies on Friday, on track for its biggest
single-day drop in three weeks, on persistent doubts whether the
Federal Reserve would raise interest rates again this year due
to softening inflation data.
    The greenback was also broadly weaker versus
commodity-linked currencies, which got a boost as global
benchmark Brent futures recovered from a seven-month low.

    Sterling rose for a third consecutive day following a speech
by soon-to-depart Bank of England policymaker Kristin Forbes,
who late Thursday urged hiking U.K. rates immediately to stem a
weaker pound.
    Trading volume was muted in the absence of major economic
data, according to traders and analysts.
    "This has been largely a week of consolidation among major
currency pairings given the lack of economic data this week,"
said Omer Esiner, chief market strategist at Commonwealth
Foreign Exchange in Washington.
    The dollar index, which tracks the dollar against six major
peers, fell 0.37 percent at 97.232, retreating further
from a one-month peak reached on Tuesday. 
    The euro was up 0.45 percent at $1.1200, while the
greenback slipped to 111.22 yen.
    The pound gained 0.4 percent at $1.2728. 
    The greenback rose earlier this week on comments from New
York Fed President William Dudley, who said a tightening labor
market would push up wages and cause U.S. inflation to reverse
from its current pullback.
    The U.S. Consumer Price Index has come in
weaker-than-expected for three consecutive months. This raised
concerns whether inflation would reach the Fed's 2 percent goal.
    Traders, however, were doubtful about this premise, which
would support the case for another rate increase later this year
as recent U.S. data on balance have fallen short of forecast.
    On Friday, Markit's flash June reports on U.S. factory and
services activity was weaker than expected, while the government
said new home sales rebounded more than expected in May.

    "The data need to confirm the Fed's stance for another rate
hike this year," Esiner said.
    The futures market implied traders saw a 53 percent chance
the Fed would raise rates in December, CME Group's
FedWatch program showed.
    Meanwhile, commodity-linked currencies rose with a rebound
in crude oil prices. Brent crude futures were up 0.9
percent at $45.62 a barrel after hitting their lowest since
November on Thursday.
    The Australian dollar was up 0.5 percent at
$0.7578, while the New Zealand dollar was up 0.4
percent at $0.7291. 
    Currency bid prices at 12:00PM (1600 GMT)
 Description      RIC      Last       U.S. Close  Pct     YTD Pct
                                       Previous   Change   Change
 Euro/Dollar      EUR=     $1.1196    $1.1150     +0.41%  +6.50%
 Dollar/Yen       JPY=     111.2700   111.3200    -0.04%  -4.79%
 Euro/Yen         EURJPY=  124.58     124.12      +0.37%  +1.17%
 Dollar/Swiss     CHF=     0.9691     0.9718      -0.28%  -4.78%
 Sterling/Dollar  GBP=     1.2724     1.2681      +0.34%  +3.15%
 Dollar/Canadian  CAD=     1.3262     1.3232      +0.23%  -1.25%
 Australian/Doll  AUD=     0.7575     0.7541      +0.45%  +4.99%
 Euro/Swiss       EURCHF=  1.0850     1.0836      +0.13%  +1.24%
 Euro/Sterling    EURGBP=  0.8796     0.8791      +0.06%  +3.26%
 NZ               NZD=     0.7292     0.7263      +0.40%  +5.06%
 Dollar/Norway    NOK=     8.4469     8.4885      -0.49%  -2.20%
 Euro/Norway      EURNOK=  9.4605     9.4677      -0.08%  +4.12%
 Dollar/Sweden    SEK=     8.7130     8.7482      +0.01%  -4.33%
 Euro/Sweden      EURSEK=  9.7570     9.7562      +0.01%  +1.85%

 (Additonal reporting by Jemima Kelly in Paris and Shinichi
Saoshiro in Tokyo; Editing by John Stonestreet and Dan Grebler)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below