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Posts tagged: Dollar

Dollar Steady amid Monetary Policy Speculations

By , July 22, 2014 12:19 am

Ulysses S. Grant on US 50-dollar billThe US dollar held steady today, rising a little against the Japanese yen, as traders were speculating about possible actions of US policy makers and about geopolitical risks that are driving the Forex market right now.

The dollar has the same supportive factor as the UK sterling — the interest rates outlook. While the Federal Reserve was making attempts to downplay rate hike expectations, most market participants believe that the central bank will tighten its monetary policy in not-so-distant future. The inflation report that will be released today should give hints about the performance of the US economy, which in turn may help to asses future actions of the Fed.

The greenback also received support from risk aversion caused by tensions in Eastern Europe and Middle East. Yet gains were limited, and the currency was moving sideways against the euro for the past four trading sessions. The dollar was also unable to pare last week’s drop versus the yen thus far.

EUR/USD traded near the opening level of 1.3523 as of 5:21 GMT today. GBP/USD ticked up a little from 1.7075 to 1.7078. USD/JPY was up from 101.39 to 101.49.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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Rally of NZ Dollar Fails due to Risk Aversion

By , July 21, 2014 1:26 pm

Some coins on NZD notesThe New Zealand dollar attempted to rally today with the help of the positive interest rate outlook but failed. The general market sentiment was not supportive for currencies that perceived to be relatively risky.

The Reserve Bank of New Zealand conducts its policy meeting on July 24, and most market participants expect the central bank to raise the main interest rate by at least 25 basis points. Such outlook is positive for the New Zealand currency, allowing it to rally intraday. Yet the rally failed, and the currency retreated because of the same reason as its Australian counterpart — the risk-negative sentiment that rules the Forex market currently.

NZD/USD fell from 0.8696 to 0.8687 as of 18:47 GMT today after rallying to 0.8719 earlier. NZD/JPY retreated from 88.14 to 88.06 following the rise to 88.25.

If you have any questions, comments or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

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Risk Aversion Helps Dollar End Week with Gains

By , July 19, 2014 7:00 am

Focus on hundred dollarsThe US dollar gained this week with help of geopolitical tensions in Eastern Europe and Middle East that were driving the Forex market by the end of the week. The greenback ended the week flat versus the Japanese yen, another currency that profited from the need for safety.

The US currency started the week on a positive note due to speculations about an eventual interest rate hike from the Federal Reserve. Fed Chairwoman Janet Yellen sent confusing message to the market regarding future monetary policy, resulting in a mixed performance for the dollar. Still, most Forex traders considered her comments to be more hawkish than dovish.

The greenback received another boost in the second half of the week from risk aversion, caused by the plane crash over Ukraine and Israel’s offensive in Gaza. While fears receded by the weekend, the theme of geopolitical risks will likely continue to dominate markets next week too.

EUR/USD dropped from 1.3599 to 1.3524, the weakest weekly close since January, while GBP/USD declined from 1.7121 to 1.7085, following the rally to 1.7190 — the highest since October 2008. USD/JPY closed at 101.34, not far from the opening of 101.38.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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Risk Aversion Helps Dollar End Week with Gains

By , July 19, 2014 7:00 am

Focus on hundred dollarsThe US dollar gained this week with help of geopolitical tensions in Eastern Europe and Middle East that were driving the Forex market by the end of the week. The greenback ended the week flat versus the Japanese yen, another currency that profited from the need for safety.

The US currency started the week on a positive note due to speculations about an eventual interest rate hike from the Federal Reserve. Fed Chairwoman Janet Yellen sent confusing message to the market regarding future monetary policy, resulting in a mixed performance for the dollar. Still, most Forex traders considered her comments to be more hawkish than dovish.

The greenback received another boost in the second half of the week from risk aversion, caused by the plane crash over Ukraine and Israel’s offensive in Gaza. While fears receded by the weekend, the theme of geopolitical risks will likely continue to dominate markets next week too.

EUR/USD dropped from 1.3599 to 1.3524, the weakest weekly close since January, while GBP/USD declined from 1.7121 to 1.7085, following the rally to 1.7190 — the highest since October 2008. USD/JPY closed at 101.34, not far from the opening of 101.38.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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Canadian Dollar Ends Week on Positive Note

By , July 18, 2014 8:07 pm

A fan of 100-dollar notesThe Canadian dollar ended the trading week on a positive note with help of supportive macroeconomic releases from Canada, which showed that the economy performs rather well and may weather monetary tightening from the nation’s central bank.

Canada’s Consumer Price Index rose 2.4 percent in June from a year ago, the fastest rate of growth in more than two years. Month-on-month, consumer prices grew 0.3 percent on a seasonally adjusted basis. Wholesale sales climbed 2.2 percent in May, year-over-year, the rate of increase being far above the predicted 0.7 percent and the April’s 1.4 percent.

The Bank of Canada conducted a policy meeting this week, leaving its main interest rate at 1 percent. In the accompanying statement, BoC Governor Stephen Poloz voiced an opinion that the pickup of inflation was caused by temporary factors:

This pickup in measured inflation is attributable to the temporary effects of higher energy prices, exchange rate pass-through and other sector-specific shocks. It is not coming from any change in domestic economic fundamentals.

USD/CAD dropped from 1.0756 to close at 1.0736, reaching the minimum of 1.0708 intraday. EUR/CAD fell from 1.4552 to 1.4479 before it settled at 1.4520. CAD/JPY climbed from 94.01 to 94.39, while its daily high was at 94.85.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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US Dollar Continues to Gain on Expectations

By , July 18, 2014 6:31 am

Focus on one US dollarUS dollar index is higher today as the greenback continues to gain on expectations for improvement in the economy. With Janet Yellen’s upbeat assessment earlier this week, even slightly mixed data can’t dampen the spirits of those that think the US dollar will soon gain strength as the Fed reduces is easing efforts.

Greenback is higher against most of it major counterparts today, gaining on expectations that the Federal Reserve will quit easing and even raise rates ahead of schedule. In testimony before members of Congress earlier this week, Federal Reserve Chair Janet Yellen was upbeat, and suggested that interest rates could head higher sooner than expected.

Even with economic data that has been mixed, there is still a lot of enthusiasm for the greenback, especially when the dollar’s potential performance is contrasted with that of the euro. Between policy divergence and better expectations dollar strength appears to be coming. Dollar is also getting help from the fact that commodities like gold and oil are losing ground today.

At 13:19 GMT the US dollar index is higher, gaining to 80.5650 from the open at 80.5780. EUR/USD is lower, dropping to 1.3495 from the open at 1.3526. GBP/USD is also lower, falling to 1.7046 from the open at 1.7101. USD/JPY is higher, moving up to 101.4150 from the open at 101.1780.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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Yellen’s Comments Confusing, Dollar Has Mixed Reaction

By , July 17, 2014 12:35 am

Packs of US 100-dollar billsThe US dollar traded sideways as comments of Federal Reserve Chairperson Janet Yellen were received with a mixed reaction by the Forex market. The currency demonstrated strong gains against the euro for two consecutive sessions.

On one hand, Yellen reiterated that interest rates are likely to stay low for a prolonged period after monetary stimulus will be removed. On the other, the Chairwoman said that monetary tightening may occur sooner if the labor market continues to improve at a stable rate. All in all, Yellen’s testimony was fairly optimistic:

I do think the economy is recovering and that growth is picking up. We have sufficient growth to support continued improvement in the labor market.

As for economic data from the United States, it was not particularly good this week. The notable exception was the Empire State Manufacturing Survey, which showed unexpectedly strong growth of the sector.

EUR/USD dropped from 1.3567 to 1.3525 before trading at 1.3530 as of 00:48 GMT today. GBP/USD traded at about 1.7138, while USD/JPY was near 101.64, both currency pairs being not far from the opening.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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US Dollar Index Gains Mostly Due to Policy Divergence

By , July 15, 2014 10:29 am

Many US hundred-dollar billsUS dollar index is heading higher today, gaining ground as policy divergence becomes more of an issue, especially with the euro. Since the euro is the currency with the heaviest weight in the dollar index basket of currencies, it’s no surprise that the index is doing well.

The US dollar continues to benefit from a combination of expectations that the Federal Reserve will have to raise rates at some point and the fact that policy divergence means that other currencies won’t see the same tightening.

Indeed, the dollar is higher against the euro after a disappointing ZEW, while the sterling remains strong against the greenback as good economic news continues to come in for the United Kingdom. There is a bit of risk aversion in the markets as well, with concern about the geopolitical situation, as well as fresh worries that stocks are in a bubble.

For now, all signs point to a stronger dollar index, although that could change quite quickly.

At 13:37 GMT the dollar index is up 80.2070 from the open at 80.1690. EUR/USD is down to 1.3603 from the open at 1.3619. GBP/USD is higher, moving up to 1.7166 from the open at 1.7084. USD/JPY is gaining, moving up to 101.6180 from the open at 101.5385.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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ZEW Sends Euro Below 1.3600 Mark Against Dollar

By , July 15, 2014 7:47 am

Multiple euro banknotes and coinsThe euro is losing ground fast, thanks in large part to the latest data out of Germany. Concerns about the German ZEW have the euro down pretty much across the board, particularly against the US dollar. Concerns about the eurozone’s largest economy have many speculating that, perhaps, the ECB will have to take further steps to stimulate the economy of the 18-nation currency region.

Germany is the eurozone’s largest economy, and is often seen as the bellwether for the entire eurozone. The ZEW measures investor morale, and the latest reading showed a drop to 27.1, which is its lowest reading in about 18 months. Analysts had expected a reading of 28, which means that this news is even more disappointing.

There are concerns that a drop in Germany’s economy could drag on the rest of the eurozone, leading to more aggressive steps by the ECB to boost the eurozone economy. This could mean more easing — and more losses — for the euro. Right now the euro is lower against its major counterparts, including plunging through the 1.3600 against the US dollar.

At 14:41 GMT EUR/USD is down to 1.3575 from the open at 1.3619. EUR/GBP is also lower, dropping to 0.7912 from the open at 0.7971. EUR/JPY is down to 138.0815 from the open at 138.2850.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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Canadian Dollar Makes Up Some Lost Ground

By , July 14, 2014 7:17 am

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Canadian dollar is making up some lost ground today, gaining against the US dollar. After disappointing data at the end of last week, the loonie headed lower, but today the Canadian currency is making something of a turnaround. Many Forex traders are looking forward to the interest rate announcement expected from the Bank of Canada on Wednesday. (…)Read the rest of Canadian Dollar Makes Up Some Lost Ground […]

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