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Posts tagged: Dollar

Hawkish Fed Sends Dollar Higher Against Counterparts

By , July 29, 2014 9:11 am

Mix of US dollar billsUS dollar is higher today, at one point reaching a new eight-month high against the euro. Thanks to the perception that the Federal Reserve is becoming hawkish, the greenback is gaining ground as Forex traders expect tighter monetary policy.

The Federal Open Market Committee is in the midst of a two-day meeting, and many expect that tomorrow Janet Yellen will announce another $ 10 billion cut to its bond buying program. Additionally, there is speculation that a hint of when interest rates might move higher (sooner rather than later) will also be revealed.

Many Forex traders see the improvement in data out of the United States as a driver toward tighter monetary policy. That would strengthen the US dollar, especially against its major counterparts that aren’t ready to tighten. Policy divergence is one of the main reasons that the greenback has been enjoying strength lately — especially against the euro. As long as the Fed appears to be on the verge of hawkishness, the greenback is likely to head higher.

At 15:12 GMT US dollar index is up to 81.1920 from the open at 81.0060. EUR/USD is down to 1.3414 from the open at 1.3439. GBP/USD is down to 1.6944 from the open at 1.6983. USD/JPY is up to 102.0545 from the open at 101.8600.

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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Australian Dollar Ends Week Among Best Performing Currencies

By , July 26, 2014 1:09 pm

Banjo Paterson on Australian 10-dollar billThe Australian dollar was among the best performers on the Forex market this week despite the risk-negative sentiment. Both domestic and overseas news contributed to the currency’s strength.

Domestically, the Aussie received boost from the Australian inflation data. As for news outside of Australia, the positive manufacturing report from China, the biggest trading partner of the South Pacific nation, contributed to the strength of the Australian currency. The negative traders’ mood was still weighing on the currency, limiting gains but not stopping the rally altogether.

Among the biggest losers was the New Zealand dollar that has been weakened after the Reserve Bank of New Zealand announced a pause for the interest rate hikes cycle. The Bank of England minutes hurt the sterling, showing that the central bank is not in hurry to raise borrowing costs.

AUD/USD ended the week at 0.9395, near the opening of 0.9391, rising to 0.9470 during the week. EUR/AUD dropped from 1.4396 to 1.4294, and its weekly low of 1.4203 was the weakest rate of November 3. AUD/JPY advanced from 95.23 to 95.67. AUD/NZD surged from 1.0787 to 1.0983.

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

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NZ Dollar Sinks After RBNZ Statement

By , July 24, 2014 12:13 pm

Kiwi denominationsThe New Zealand dollar sank today after the Reserve Bank of New Zealand raised its key Official Cash Rate but signaled that it is going to pause the interest rate hike cycle. The central bank also said that the current exchange rate is “unjustified”.

The RBNZ lifted its benchmark interest rate by 25 basis points to 3.5 percent, exactly as was expected. Yet at the same time Reserve Bank Governor Graeme Wheeler stated:

It is prudent that there now be a period of assessment before interest rates adjust further towards a more-neutral level.

He also mentioned the current high value of the New Zealand dollar, voicing opinion that it is excessive:

With the exchange rate yet to adjust to weakening commodity prices, the level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall.

The major part of the currency’s strength was derived from expectations of continuous rate hikes, meaning that the kiwi will have hard time keeping gains after that supporting factors was removed. The RBNZ still has hawking bias, and the NZ dollar may yet regain its strength in the future when the monetary tightening cycle will resume, but for now the currency trades near the lowest level in a month.

NZD/USD tumbled from 0.8677 to 0.8574 as of 19:02 GMT today, trading near the lowest level since June 12. EUR/NZD jumped from 1.5467 to 1.5700. NZD/JPY plunged from 88.17 to 87.31, touching the low of 86.92 intraday — the weakest price since June 11.

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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US Dollar Index Heads Higher as Gold Drops

By , July 24, 2014 9:27 am

Ulysses S. Grant on US 50-dollar billUS dollar index is heading higher, gaining ground as gold drops. It’s an interesting situation today, since the dollar index is gaining, even though the euro is heading higher against the dollar for the time being.

US dollar is getting a bit of a boost today from the fact that jobless claims have hit an eight-year low. The news is once again spurring speculation that the Federal Reserve will have no choice but to raise interest rates at some point. This news isn’t helping the stock market much, but the US dollar index is heading higher.

Even though this latest news is in sharp contrast to the situation in the eurozone, though, the euro is a bit higher against the greenback today. Other currencies, aren’t doing as well. Additionally, gold is heading lower. Indeed, gold’s dramatic drop today is one of the big reasons that the dollar index, in general, is seeing solid gains.

At 14:42 GMT the US dollar index is up to 80.8410 from the open at 80.8130. EUR/USD is a little higher, up to 1.3469 from the open at 1.3463. GBP/USD is lower, though, dropping to 1.6975 from the open at 1.7044. USD/JPY is higher today, moving up to 101.7955 from the open at 101.4810.

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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Australian Dollar Jumps After Release of CPI

By , July 22, 2014 7:22 pm

David Unaipon on Australian 50-dollar billThe Australian dollar demonstrated a huge jump today immediately after inflation data was released in Australia. The report was in line with market expectations, suggesting that the Australian central bank will keep monetary policy stable, refraining from an interest rate cut.

The Consumer Price Index rose 0.6 percent in the second quarter of 2014 from the first quarter, on a seasonally adjusted basis. The trimmed mean CPI, which demonstrates the underlying inflation trend through component weighting and anomaly exclusion, was up 0.8 percent. Both readings matched forecasts exactly.

Glenn Steven, Reserve Bank of Australia Governor, said this week that he is content with the current monetary policy. While today’s data does not suggest that an interest rate hike is possible, at least it proves that there is no reason to expect more accommodative policy, which would be detrimental to the Aussie’s performance.

The Australian currency was also supported by speculations that a manufacturing report from China, which is released this week, will show faster growth of China’s manufacturing sector.

AUD/USD jumped from 0.9393 to 0.9434, while AUD/JPY advanced from 95.30 to 95.68 as of 2:13 today. GMT EUR/AUD sank from 1.4330 to 1.4269, trading near the lowest rate since November.

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

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Canadian Dollar Looks to Hold to Yesterday’s Gains

By , July 22, 2014 8:30 am

A fan of 100-dollar notesCanadian dollar is hoping to hold on to some of yesterday’s gains, and with thin trading and concerns about the geopolitical situation, that’s a possibility.

Yesterday, the loonie closed higher against most of its major counterparts, thanks in large part to the fact that this week is a thin one for data, and thanks to geopolitical tensions that have many looking for non-European investments right now. Concerns that the situation in Ukraine will lead to greater sanctions on Russia are worrying some because the impact of industry-wide sanctions could bleed over into the eurozone economy.

The Canadian dollar also got some help yesterday from higher commodities. Today, though, oil and gold are heading a little lower, and so won’t be much help to the loonie. For now, the loonie is managing to hold on to tenuous gains, but it may not last. Many expect Statistics Canada to release a favorable retail sales report tomorrow, but any indication that things aren’t going as well as expected could send the Canadian dollar lower.

At 13:18 GMT USD/CAD is a little bit lower, dropping to 1.0735 from the open at 1.0739. EUR/CAD is struggling a bit more, falling to 1.4477 from the open at 1.4523. GBP/CAD is only a little lower, dropping to 1.8329 from the open at 1.8338.

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

Forex News

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.

Forex News

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.

Forex News

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.

Forex News