020 7898 0500The dollar started the week in mildly disappointing fashion, as a lack of data gave it little opportunity for encouragement. The currency also suffered as words from members of the US Federal Reserve were pessimistic over interest rate rises, causing the dollar to fall. Hopes of any rate hikes coming sooner rather than later were dampened, with William Dudley saying that the current inflation levels gave pause for patience. Alongside this sentiment, the housing market showed consecutive disappointing figures to further add to the dollar’s struggles. Fortunes were reversed mid-week, however, thanks to the significant release of the day. The new home sales data came out much better than expected, with a strong increase from the month before. As a result, the dollar rose to a 14-month high against the euro, with hopes of interest rate rises returning.
Yesterday saw maintained strength for the dollar, thanks to the belief that US interest rate rises will come before of those in other countries. This helped the currency to extended its record level against the euro to the best since November 2012, while also gaining against the majority of its other main currency partners. Other data was largely as expected, with both the durable goods orders and the unemployment claims steadying the currency. Today holds one final significant release being updated growth figures for quarter 2. As a good all round measure of economic health, investors will be keen to see the update especially given the fact that interest rate rises have been said to be data-led.
