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Dollar drops to 7-week lows vs. other majors

Published 08/16/2016, 05:40 AM
Updated 08/16/2016, 05:40 AM
© Reuters.  Dollar loses further ground vs. rivals as U.S. data continues to weigh

© Reuters. Dollar loses further ground vs. rivals as U.S. data continues to weigh

Investing.com - The dollar dropped to seven-week lows against the other major currencies on Tuesday, as a flurry of downbeat U.S. data released last week and on Monday continued to weigh heavily on the greenback.

EUR/USD advanced 0.76% to 1.1267.

The dollar remained under broad selling pressure after a recent string of disappointing U.S. economic reports fueled concerns over the strength of the economy and dampened expectations for a rate hike before the end of the year.

Earlier Tuesday, the ZEW Centre for Economic Research said that its index of German economic sentiment rose to 0.5 this month from July’s reading of minus 6.8 that had been its lowest level since November 2012. Analysts had expected the index to increase to 1.8 in August.

The index of euro zone economic sentiment increased to 4.6 in August from -14.7 a month earlier. Consensus was looking for a read of -6.3.

GBP/USD climbed 0.73% to 1.2977, off Monday’s one-month trough of 1.2862.

The pound strengthened after the U.K. Office for National Statistics said the rate of consumer price inflation rose by an annual rate of 0.6% last month, above forecasts for a gain of 0.5% and compared to the 0.5% increase seen in June.

Month-over-month, consumer prices fell 0.1% in July, in line with forecasts and after the prior month’s 0.2% increase.

USD/JPY retreated 1.04% to 100.21, while USD/CHF tumbled 1.05% to 0.9635.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.69% at 0.7725 and with NZD/USD rallying 1.01% to 0.7286.

In the minutes of its August policy meeting released on Tuesday, the Reserve Bank of Australia said economic growth was expected to pick up to be above estimates of potential by mid 2017.

This statement differed from the central bank’s August 5 statement forecasting a pickup in growth in 2018.

The upbeat outlook contradicted previous expectations for further rate cuts by the RBA. At the beginning of the month, the central bank lowered its benchmark interest rate to a record-low 1.5%.

Elsewhere, USD/CAD slid 0.44% to a fresh one-month low of 1.2865.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.77% at 95.59, the lowest since June 24.

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