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Forex - Dollar holds weaker in Asia on Trump, RBA minutes noted

Published 05/15/2017, 10:26 PM
Updated 05/15/2017, 10:27 PM
Dollar holds gains

Dollar holds gains

Investing.com - The dollar held weaker in Asia on Tuesday as markets chewed on the latest controversy in the Trump administration after an explosive story in the Washington Post suggested he had provided Russian diplomats with top secret details on Middle Eastern intelligence sources, while the Aussie held gains after the release of minutes.

AUD/USD traded at 0.7422, up 0.12%, while USD/JPY traded at 113.54, down 0.21%. The Reserve Bank of Australia released the minutes from its May meeting and focused on the overheated housing market, and signs of softness in job creation as key signposts for the direction of interest rates.

The RBA held at a record low 1.5% in the May meeting and in the minutes said "developments in the labor market and housing markets warranted careful monitoring." Still, RBA Governor Philip Lowe has made it clear in recent speeches he would be reluctant to lower interest rates any further, saying the vast debts carried by the average Australian household could slow GDP growth if unrestrained.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted down 0.09% to 98.72.

Overnight, the dollar fell against a basket of major currencies on Monday, after weaker than expected U.S. manufacturing data weighed on sentiment while a surge in the Canadian dollar added to downside momentum.

The Federal Reserve Bank of New York said its Empire State manufacturing index fell last month to minus 1, from 5.2 in April, as new orders dipped and shipment grew more quickly.

The softer manufacturing print dented traders’ expectations for a June rate – according to investing.com’s Fed rate monitor tool 70% of traders expect the Federal Reserve to hike its benchmark rate in June compared to nearly 80% of traders in the previous week.

Meanwhile, oil-sensitive currencies soared, after Saudi and Russian energy ministers said on Monday that they would support an extension of the supply-cut agreement into 2018.

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