USD continued to decline on Thursday, with data unable to bolster sentiment after Wednesday's FOMC minutes showed concerns over China could put a September Fed rate lift-off in jeopardy
The USD shrugged off a spate of higher than expected data points to continue its recent downtrend after the dovish FOMC minutes release yesterday dampened expectations for a September rate hike. Participants now consider a Fed rate lift-off less likely in September, with the FOMC highlighting concerns regarding China even though the minutes relate to a meeting prior to the latest wave of bearish news from the economic superpower.
After the substantial fall in the USD-index after yesterday’s FOMC minutes, the greenback continued to soften throughout today’s session, seeing EUR/USD end the European session around the 1.1200 handle after today saw Greece receive the first tranche of the third bailout and repay the ECB 3.2 billion EUR .
Weakness in USD comes despite a host of data which could be interpreted as positive for the USD, including the highest existing home sales since February 2007 (5.59M vs. Exp. 5.43M) and higher than expected US Philadelphia Fed Business (8.3 vs. Exp. 6.8). Of note, RANsquawk sources heard unconfirmed talk of large US funds selling USD in the latter part of the European session.