An unexpected improvement in activity in the services sector helped to push the U.S. Dollar Index higher to an 11-month peak; that improvement has helped to increase speculation that third quarter economic growth will have also improved and likely be on track to finish the year on target. The Institute for Supply Management reported that June’s reading for non-manufacturing PMI improved to 58.7 from 56.0, the highest reading in more than 8 months and one which beat analysts’ expectations; meanwhile an improvement in factory orders in June also helped to provide some momentum for the greenback.
As reported at 11:17 a.m. (JST) in Tokyo, the U.S. Dollar Index had traded at an 11-month peak at 81.626 .DXY before slipping slightly to 81.537 .DXY. The EUR/USD traded at $1.3370, pulling away from a 9-month low at $1.3358. The USD/CAD had earlier hit a 3-month peak at C$1.0977, moving away from July’s low of C$1.0620;
Falling Export Prices Send Kiwi Dollar Lower
In New Zealand, the Kiwi Dollar continues to come under significant pressure, once again as a result of falling dairy prices; dairy is one of New Zealand’s key export sectors. As a result, the NZD/USD dipped to a 2-month trough at $0.8428 before edging back to $0.8442; since last month’s high at $0.8839, the Kiwi Dollar has lost nearly 4.5%.