The U.S. dollar fell against its most major counterparts in early European deals on Monday, pressured by continued expectations that the Federal Reserve would begin cutting rates later this month, after dovish remarks from Federal Reserve Chairman Jerome Powell last week.
Markets are pricing in a 25-basis point rate cut by the Fed at its next meeting on July 30-31.
Investors cheered China data showing better than expected retail sales and industrial production for June.
The data suggested that the economy is in better shape, offering some relief to investors worried about slowing global growth.
Annual growth in industrial production advanced more-than-expected to 6.3 percent from 5 percent in May, showing the fastest growth in three months.
Likewise, retail sales grew at a faster pace of 9.8 percent after rising 8.6 percent a month ago. Economists had forecast an 8.5 percent increase for June.
Today’s economic calendar is light, with the New York Fed’s Empire State Manufacturing Index being the sole release.
Tuesday will see the release of retail sales figures, industrial production and NAHB housing market index.
U.S. building permits and housing starts are due on Wednesday, followed by Philadelphia Fed’s Manufacturing Survey on Thursday and the University of Michigan’s preliminary consumer sentiment on Friday.
The currency traded mixed against its major opponents in the Asian session. While it held steady against the euro and the franc, it fell versus the pound and the yen.
The greenback fell to 0.9828 against the franc, its lowest since July 1. The greenback is seen finding support around the 0.96 region.
Data from the Federal Statistical Office showed that Swiss producer and import prices decreased in June.
Producer and import prices decreased 1.4 percent year-on-year in June.
The greenback depreciated to a 4-day low of 1.1284 against the euro from last week’s closing value of 1.1270. The next possible support for the greenback is seen around the 1.15 level.
The greenback dropped back to 107.86 against the yen, on track to pierce a session’s low of 107.80 hit in the Asian session. The currency is poised to find support around the 106.00 region.
Extending early losses, the greenback dropped to 0.6726 against the kiwi for the first time since July 1. If the greenback extends drop, 0.68 is possibly seen as its next support level.
The greenback pared gains to 1.3021 against the loonie, from a high of 1.3043 hit at 9:30 pm ET. The currency is likely to find support around the 1.285 region.
The greenback held steady against the aussie, after having dropped to near a 2-week low of 0.7035 at 12:00 am ET. The pair finished last week’s deals at 0.7018.
On the flip side, the greenback rose to 1.2547 against the pound, after falling to 1.2578 at 6:00 pm ET. On the upside, 1.24 is possibly seen as the next resistance for the greenback.
Data from property website Rightmove showed that UK house prices declined for the first time this year in July.
House prices decreased 0.2 percent month-on-month in July, following a 0.3 percent rise in June.
The New York Fed’s Empire State Manufacturing Index for July is due at 8:30 am ET.
The material has been provided by InstaForex Company – www.instaforex.com
Source:: Dollar Drops On Fed Rate Cut Bets