Dollar Falls After Weak Economic Data; Fed Meeting In Spotlight

Date : 06/17/2019 @ 6:43PM
Source : RTTF2
Stock : Pound Sterling vs United States Dollar (GBPUSD)
Quote : 1.312355  -0.00348 (-0.26%) @ 11:03PM
Sterling vs US Dollar share price Chart

Dollar Falls After Weak Economic Data; Fed Meeting In Spotlight

Sterling vs US Dollar (FX:GBPUSD)
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6 Months : From Jun 2019 to Dec 2019

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The U.S. dollar fell against its major counterparts in early New York deals on Monday, as New York Fed's Empire manufacturing activity unexpectedly contracted in June and investors cautiously awaited the Fed meeting due this week for more clues about possible reduction in interest rates.

Data from the Federal Reserve Bank of New York showed that manufacturing activity in New York took a sharp downward turn in the month of June, with the index of activity in the sector showing a record monthly decline.

The New York Fed said its general business conditions index plunged to a negative 8.6 in June from a positive 17.8 in May, with a negative reading indicating a contraction in manufacturing activity. Economists had expected the index to drop to a positive 10.0.

Data from the National Association of Home Builders showed that U.S. homebuilder confidence unexpectedly pulled back in June, after reporting a substantial improvement in the previous month.

The report said the NAHB/Wells Fargo Housing Market Index dropped to 64 in June after jumping to 66 in May. The decrease surprised economists, who had expected the index to inch up to 67.

The Fed's begins its monetary policy meeting on Tuesday, with a decision due on Wednesday.

Market participants are widely expecting the Fed to drop the word "patient" from its statement, a signal that it is willing to cut interest rates in future against the backdrop of trade tensions and slowing growth in the U.S.

CME Group's FedWatch tool currently indicates just a 22.5 percent chance the Fed will cut rates this week but a 65.7 percent chance for a rate cut next month.

The currency traded mixed against its major counterparts in the Asian session. While it rose against the franc and the yen, it held steady against the euro. Against the pound, it declined.

The greenback retreated to 108.52 against the yen, from a 6-day high of 108.72 hit at 7:15 am ET. If the greenback falls further, 106.00 is likely seen as its next possible support level.

Following a 2-week high of 0.9998 hit at 12:45 am ET, the greenback reversed direction and declined to 0.9966 against the Swiss franc. On the downside, 0.96 is possibly seen as the next support level for the greenback.

The greenback depreciated to 1.1247 against the euro, following an advance to 1.1204 at 3:15 am ET. The greenback is poised to face support around the 1.45 region.

Data from Eurostat showed that Eurozone labor costs increased at a slightly faster pace in the first quarter.

Hourly labor costs grew 2.4 percent year-on-year, slightly faster than the 2.3 percent increase seen in the fourth quarter.

After rising to more than a 2-week high of 1.2572 against the pound at 3:45 am ET, the greenback pulled back to 1.2605. The next possible support for the greenback is seen around the 1.27 level.

Data from the property website Rightmove showed UK house prices rose slightly in June.

House prices increased 0.3 percent month-on-month in June but remained flat on a yearly basis. Prices had advanced 0.9 percent on month and 0.1 percent annually in May.

The greenback was trading lower at 1.3402 against the loonie, down from a high of 1.3419 seen at 3:15 am ET. Should the greenback weakens further, 1.32 may be seen as its next possible support level.

On the flip side, the greenback appreciated to 0.6863 against the aussie from an early low of 0.6885. The greenback may test resistance around the 0.67 level, if it rises again.

The greenback bounced off to 0.6499 against the kiwi, from a low of 0.6515 set at 8:30 am ET. The currency is seen finding resistance around the 0.63 region.

The latest survey from BusinessNZ showed that New Zealand services sector continued to expand in May, and at a faster rate, with a performance of Services Index score of 53.6.

That's up from 52.0 in April, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

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P: V:fm D:20191206 15:18:33