Dollar Broadly Higher on Focus Shift

The Dollar edged higher during the European session as markets re-shift their focus to the US and the monetary policy decision of the Federal Reserve Bank. The Fed is due to release its meeting minutes later this week. Most experts believe that a September rate increase remains a possibility but that the Fed will likely point out that economic data will drive their decision. The US Dollar also was supported by the ongoing decline in the majority of emergent market currencies which are falling amid the Chinese Yuan’s devaluation.

As reported at 11:15 am (BDT) in London, the US Dollar Index traded higher at 96.899 .DXY, a gain of 0.1% and off last week’s 1-month trough at 95.926 .DXY. The EUR/USD was down at $1.1073, a decline of 0.04% and nearly mid range of the day’s trading band. The AUD/USD was lower at $0.7355, down 0.23%.

UK Inflation Provides Positive Surprise

In the United Kingdom, the Pound Sterling got a lift after the release of inflation data surprised to the upside. The Office of National Statistics reported that core inflation edged up to 1.2% in July, against expectations that it would remain flat at 0.8%. The CPI data, both on month-over-month and year-over-year bases, also beat expectations. The GBP/USD was trading higher at $1.5706, a gain of 0.78% and the day’s peak at $1.5718. The news will help investors gauge the next likely move of the Bank of England which could put a possible rate hike back on the table.

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.