U.S. Dollar Higher On Strong Housing Data, Fed Rate Hike Hopes
October 25 2016 - 5:59AM
RTTF2
The U.S. dollar rallied against its major counterparts in early
New York trading on Tuesday, as separate reports showed that U.S.
home prices improved in August and comments from Fed officials
added to hopes for an interest rate hike by December.
Data from the Federal Housing Finance Agency showed that the
U.S. house prices rose a seasonally adjusted 0.7 percent on month
in August, from a 0.5 percent gain in the previous month.
Economists had expected the index to match the July's estimate.
Data from the S&P/Case-Shiller showed that its home price
index registered a 5.3 percent annual gain in August, up from 5.0
percent last month.
The 20-City Composite index rose 5.1 percent year over year, up
from July's 5.0 percent.
Chicago Fed President Charles Evans said Monday that the Fed may
raise rates three times by the end of 2017, while the Fed Bullard
recommended a quarter point increase in interest rates to boost the
rate of return on safe assets.
The Federal Open Markets Committee meets on November 1-2 to
consider interest rates, but is not expected to act ahead of the
U.S. Presidential elections.
The currency has been trading in a positive territory in the
previous session.
The greenback spiked up to 0.9997 against the Swiss franc, a
level not seen since March 2016. Continuation of the greenback's
uptrend may see it challenging resistance around the 1.02 mark.
The greenback that ended yesterday's trading at 104.18 against
the Japanese yen strengthened to a 3-month high of 104.80. The
greenback-franc pair is poised to test resistance near the 106.00
area.
The greenback reversed from an early low of 1.0893 against the
euro, advancing to a 7-1/2-month high of 1.0853. Further gains may
take the greenback to a resistance around the 1.06 region.
Survey data from Ifo institute showed that German business
sentiment rose to the highest level in more than two years in
October. The Ifo business confidence index rose to 110.5 from 109.5
in the prior month. The expected reading was 109.
The greenback rallied to an 8-day high of 1.2147 against the
pound, off its early low of 1.2243. The greenback is poised to test
resistance around the 1.20 zone.
The greenback bounced off to 1.3359 against the loonie, from a
4-day low of 1.3278 hit at 5:15 pm ET. The next possible resistance
for the greenback-loonie pair is seen around the 1.35 level.
The greenback rose back to 0.7124 against the kiwi and 0.7618
against the aussie, from its early low of 0.7161 and a 4-day low of
0.7648, respectively. The currency has already set an 8-day high of
0.7109 against the kiwi and a 4-day high of 0.7589 against the
aussie early in the Asian session. If the greenback extends rise,
0.70 and 0.75 are possibly seen as the next resistance levels for
the greenback against the kiwi and the aussie, respectively.
The U.S. consumer confidence index for October is slated for
release at 10:00 am ET.
At 10:35 am ET, Bank of England Governor Mark Carney is
scheduled to testify about the economic consequences of the Brexit
Vote before the House of Lords Economic Affairs Committee in
London.
At 11:30 am ET, European Central Bank President Mario Draghi is
expected to speak about stability, equity, and monetary policy at
the German Institute for Economic Research in Berlin.
At 1:20 pm ET, Atlanta Fed President Dennis Lockhart is expected
to speak to the Opportunity Finance Network about "Lending and
Investing in Community Development" in Atlanta.
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