The Dollar rose in Asia, but trades close to a one-month low
The U.S. dollar rose on Friday morning in Asia; however, it remained close to a one-month low. As we know, U.S. Federal Reserve kept a dovish stance in its latest policy decision. Moreover, disappointing U.S. economic data also curbed the greenback’s month-long rally.
The U.S. dollar index that tracks the dollar against its rivals rose 0.11% to 91.970. In the previous session, it declined as low as 91.855, the lowest level since June 29 and was set to end the week off 1%. Notably, that was its worst weekly showing since early May 2021. The U.S. index also fell 0.5% in July so far after its 2.8% gain in June.
The dollar against the Japanese yen surged 0.03% to trade at 109.50. Meanwhile, the risk-sensitive Australian dollar surged 0.08% against the dollar to 0.7389. Its New Zealand counterpart fell by 0.08% versus the dollar to 0.7003.
The American currency against the Chinese yuan gained 0.06% to 6.4600. The British pound versus the greenback fell by 0.09% to trade at 1.3948. The sterling was close to its highest in over a month. The currency was bosted b the greenback’s weaker tone and a decline in daily COVID-19 infections in the United Kingdom.
Fed Chairman Jerome Powell’s comments set the dollar on a downward trend
Fed Chairman Jerome Powell’s comments, made as the central bank handed down its policy decision, set the dollar on a downward trend. Powell announced that interest rate hikes were some way off, and the job market still had some ground to cover before asset tapering could start.
Thursday’s U.S. GDP figures for Q2 of 2021 also failed to support the greenback. The U.S.’s GDP rose a solid 6.5% quarter-on-quarter in the second quarter of 2021. However, it was lower than both the 8.5% in forecasts prepared by Investing.com and the 6.3% growth posted for the first quarter.
Additional data from the U.S., including the second-quarter employment cost index, personal income and spending for June and the University of Michigan consumer sentiment index for July, are scheduled later in the day.
Moreover, the euro rose to a one-month high against the dollar. It was last trading at $1.1886 ahead of a slew of data. Second-quarter German, Italian and eurozone GDPs, alongside French, German, Italian and eurozone consumer price indexes for July and the eurozone unemployment rate, will be published later in the day.
In Asia, the Chinese yuan clawed back most of its losses from Tuesday. However, the currency was on the back foot ahead of the open of onshore markets on July 30.
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