U.S. Dollar Extends Rally Against Majors
May 27 2015 - 9:37AM
RTTF2
The U.S. dollar extended its rally against the other major
currencies on Wednesday, as yesterday's slew of strong economic
data reinforced hopes that the Fed will hike rates sooner rather
than later.
New orders for U.S. manufactured durable goods in April declined
due to a pullback in orders for transportation equipment, but were
in line with economists' expectations, the Commerce Department
report showed.
Home prices in major U.S. metropolitan areas continued to show
notable annual growth in the month of March, while new home sales
rebounded more than expected in April, separate reports showed.
Consumer confidence in the U.S. improved more-than-expected in
May after declining sharply in April, according to a report
released by the Conference Board.
Investors are now pricing in a Fed rate hike in either July or
September, as the Federal Reserve chairwoman Janet Yellen last week
confirmed they would raise interest rates if the US economic
recovery continued.
The greenback has been gaining this week, after last week's
better-than-expected inflation data, as well as comments by Yellen
that they will start raising rates this year. For the week, the
greenback rose 1.28 percent against the yen, 0.62 percent against
the pound, 1.08 percent against the franc and 1.25 percent against
the euro.
The greenback spiked up to an 8-year high of 123.77 against the
yen and nearly a 1-1/2-month high of 1.2483 against the Canadian
dollar, from early lows of 122.77 and 1.2394, respectively. The
next possible upside target for the greenback may be located around
125.00 against the yen and 1.26 against the loonie.
The greenback hit more than a 4-week high of 1.0826 against the
euro and near a 3-week high of 1.5329 versus the pound, after
having fallen to 1.0928 and 1.5436, respectively in previous deals.
On the upside, the greenback is likely to find resistance around
1.05 against the euro and 1.52 against the pound.
The greenback strengthened to a 4-week high of 0.9542 against
the franc, 5-week high of 0.7690 against the aussie and a
2-1/2-month high of 0.7211 against the kiwi, reversing from its
prior lows of 0.9466, 0.7768 and 0.7267, respectively. Continuation
of the greenback's uptrend may take it to resistance levels of
around 0.97 against the franc, 0.75 against the aussie and 0.71
against the kiwi.
Looking ahead, the Bank of Canada will announce its interest
rate decision at 10:00 am ET. Economists expect the bank to retain
interest rates unchanged at 0.75 percent.
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