Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Dollar Gains Ground Ahead Of FOMC; Aussie Suffers On Softer Inflation

Published 07/26/2017, 03:47 AM
Updated 02/07/2024, 09:30 AM

Inflation figures out of Australia were today’s main data release during Asian session trading. The softer than expected data led to the aussie posting losses. Beyond that, the dollar index seems to be maintaining some positive momentum following yesterday’s upbeat consumer confidence report.

The dollar’s index against a basket of currencies was up 0.2% as Asian traders were about to complete their trading day. It stood above the 94 mark, but not far above 93.64, the 13-month low reached yesterday. Against the yen, the US currency was not much changed. Dollar/yen last eyed the 112 handle. Yesterday the pair finished the day 0.7% higher. The Federal Reserve will complete its two-day meeting later in the day. It is widely expected to maintain interest rates at their current levels and investors will mainly focus on rate guidance throughout the rest of the year, as well as on details regarding when it will start reducing the size of its balance sheet.

Political developments have in large part been driving the dollar to a significant extent recently and new deliberations by the US Senate to repeal and replace Obamacare will also be watched by forex market participants.

In other dollar pairs, euro/dollar and pound/dollar were last down 0.2% and 0.1% on the day. Yesterday, euro/dollar rose to its highest since late August 2015 when it hit 1.1712, while pound/dollar climbed to a more than one-week high of 1.3083.

Moving to today’s major release during the Asian session, Australian consumer prices rose 1.9% year-on-year in the second quarter of the year. This fell short of expectations for a rise by 2.2% and was also below the two-and-a-half-year high of 2.1% during the first quarter of the year. On a quarterly basis, the inflation rate stood at 0.2% in the second quarter, below the 0.4% expected and the previous quarter’s 0.5%. The Australian dollar fell on the data relative to its US counterpart. Aussie/dollar last traded at 0.7892, down 0.6% on the day.

New Zealand trade data for June showed the country posting a trade surplus of NZ$242 million during the month. The local dollar edged slightly higher relative to the US dollar upon release of the data. Kiwi/dollar last traded at 0.7423, up on the day though not by much.

Turning to commodities, gold was last down 0.3%, trading at $1245.04 an ounce. WTI and Brent crude were both up 0.8% and 1.0%, at $48.38 and $50.61 respectively. Both benchmarks finished the day higher in the two preceding days, recording considerable gains.

Beyond the FOMC statement upon completion of the Fed’s meeting, UK preliminary GDP estimates for the second quarter of the year and the Energy Information Administration’s (EIA) weekly report on US crude stockpiles will also be in focus.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.