U.S. Dollar Falls After Soft China Data; Powell's Testimony Awaited
July 16 2018 - 5:47AM
RTTF2
The U.S. dollar slipped against its major counterparts in the
European session on Monday, as China's economy expanded at a slower
pace in the second quarter and investors awaited Fed Chair Jerome
Powell's congressional testimony due this week for more clues about
monetary policy outlook.
Data from the National Bureau of Statistics showed that gross
domestic product expanded 6.7 percent year-on-year in the three
months to June after growing 6.8 percent in the first quarter.
Growth was in line with economists' expectations.
The pace of expansion was the slowest since the third quarter of
2016, when the economy grew 6.7 percent.
Concerns over trade war persisted, as China filed a complaint
with the World Trade Organization against the U.S. plan to impose
tariffs on Chinese goods worth 200 billion.
Powell will appear before the Congress on Tuesday and Wednesday,
when he will discuss the state of the economy and monetary
policy.
Data from the Commerce Department showed that U.S. retail sales
increased in line with economist estimates in the month of
June.
The report said retail sales climbed by 0.5 percent in June
after soaring by an upwardly revised 1.3 percent in May. Economists
had expected sales to rise by 0.5 percent compared to the 0.8
percent increase originally reported for the previous month.
Excluding a jump in auto sales, retail sales still rose by 0.4
percent in June following a 1.4 percent spike in May. The increase
in ex-auto sales also matched economist estimates.
The currency has been trading in a negative territory against
its major rivals in the Asian session, with the exception of the
yen.
The greenback dropped to a 4-day low of 0.9969 against the
franc, from a high of 1.0024 hit at 7:10 pm ET. On the downside,
0.98 is likely seen as the next support level for the
greenback.
Reversing from an early high of 0.6758 against the kiwi, the
greenback depreciated to a 5-day low of 0.6793. The greenback is
likely to find support around the 0.69 level.
The latest survey from BusinessNZ showed that the services
sector in New Zealand continued to expand in June, albeit at a much
slower rate, with a Performance of Services Index score of
52.8.
That's down from the downwardly revised 57.1 in May.
The greenback slipped to a 5-day low of 1.1725 against the euro
and a 6-day low of 1.3293 against the pound, coming off from its
early highs of 1.1676 and 1.3225, respectively. The next possible
support for the greenback is seen around 1.19 against the euro and
1.34 against the pound.
The greenback declined to 5-day lows of 0.7443 against the
aussie and 1.3137 against the loonie, from its previous highs of
0.7409 and 1.3163, respectively and held steady thereafter. The
greenback finished Friday's trading at 0.7422 against the aussie
and 1.3153 against the loonie.
The greenback eased back to 112.27 against the yen, not far from
its early 4-day low of 112.20. If the greenback continues its fall,
111.00 is possibly seen as its next support level.
The U.S. business inventories for May are due shortly.
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