U.S. Dollar Extends Rise Amid Fed Rate Hike Optimism
July 30 2015 - 1:06AM
RTTF2
The U.S. dollar continued to be strong against the other major
currencies in the Asian session on Thursday, as the Federal
Reserve's monetary policy statement signaled the possibility of a
near-term interest rate hike, perhaps as early as September.
As was widely expected, the U.S. Federal Reserve left interest
rates unchanged. The accompanying statement by the central bank
included some subtle changes that point toward a near-term interest
rate hike, but the Fed did not provide a specific timetable. The
decision was in line with expectations.
Analysts, meanwhile, continue to expect the central bank to
begin raising interest rates at its next meeting in September or
December. A move is far more likely in September or December when
Fed Chair Janet Yellen has the opportunity to calm investor fears
at scheduled press conferences.
Traders await the release of the first estimate of
second-quarter U.S. GDP, due to be published later today. The
economy is expected to grow 2.5 percent after contracting 0.2
percent in the first quarter. It is also expected that the GDP
report may boost the currency and fuel expectation for an earlier
Fed rate hike.
Wednesday, the U.S. dollar rose 0.71 percent against the euro,
0.31 percent against the Swiss franc and 0.18 percent against the
yen.
In the Asian trading, the U.S. dollar rose to more than a
3-month high of 0.9689 against the Swiss franc, a 9-day high of
124.18 against the yen, a 6-day high of 1.0958 against the euro and
a 2-day high of 0.6627 against the NZ dollar, from yesterday's
closing quotes of 0.9667, 123.91, 1.0979 and 0.6663, respectively.
If the greenback extends its uptrend, it is likely to find
resistance around 0.97 against the franc, 125.00 against the yen,
1.08 against the euro and 0.65 against the kiwi.
Moving away from an early low of 1.5609 against the pound, the
greenback climbed to 1.5589. The greenback may test resistance near
the 1.54 region.
Against the Canadian dollar, the greenback edged up to 1.2959
from yesterday's closing quote of 1.2943. On the upside, 1.31 is
seen as the next resistance level for the greenback.
Looking ahead, Swiss KOF leading indicator and German
unemployment rate and Eurozone economic confidence index, all for
July, are due to be released in the European session.
In the New York session, preliminary German CPI for July,
advance second quarter U.S. GDP data and U.S. jobless claims for
the week ended July 25, are slated for release.
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