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Dollar index slips back lower in thin trade

ForexJul 04, 2016 10:50AM ET
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Dollar edges lower vs. other majors - The dollar slipped back lower against the other major currencies on Monday, as investors remained cautious amid ongoing uncertainty over the global effects of the Brexit vote.

Trading volumes were expected to remain thin with U.S. markets closed for Independence Day.

GBP/USD edged up 0.16% to 1.3288, still close to the 31-year low of 1.3122 set on June 27, a level not seen since 1985.

Research firm Markit and the Chartered Institute of Purchasing & Supply said on Monday that their U.K. construction purchasing managers' index fell to 46.0 in June from May’s reading of 51.2. Economists had expected the index to drop to 50.5 in June.

The pound has already been under heavy selling pressure since Britain shocked markets by deciding to leave the European Union, sparking uncertainty over the consequences of the U.K. vote on the country’s economy and the global economy as a whole.

Adding to pressure on the U.K. currency, Bank of England Governor Mark Carney indicated late last week that more stimulus may be needed over the summer, fuelling expectations for an upcoming rate cut.

EUR/USD held steady at 1.1141.

Earlier Monday, data showed that the number of unemployed people in Spain declined by 124,300 in June, blowing past expectations for a 74,300 fall and after a 119,800 drop the previous month.

USD/JPY added 0.12% to 102.59, while USD/CHF slipped 0.11% to 0.9720.

The Australian and New Zealand dollars remained higher, with AUD/USD up 0.64% at 0.7541 and with NZD/USD climbing 0.86% to 0.7232.

Markets seemed to shrug off a report by the Australian Bureau of Statistics on Monday showing that building approvals dropped by 5.2% in May, compared to expectations for a 3.3% slip.

Building approvals rose 3.3% in April, whose figure was revised from a previously estimated 3.0% gain.

Elsewhere, USD/CAD slid 0.60% to trade at a one-week low of 1.2833.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.10% at 95.62.

Dollar index slips back lower in thin trade

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