Greenback Remains Under Pressure
With the likelihood that the Federal Reserve’s FOMC will maintain monetary policy with ultra low interest rates for an extended period, the U.S. Dollar Index traded at a 7-week trough during the Asian session, extending June’s decline. The President of the San Francisco branch of the Federal Reserve said yesterday that though the members feel that the U.S. economic recovery is on track, he believed that interest rates would remain unchanged until at least mid-2015, and perhaps longer. Market players, however, are less optimistic than the Fed members and the sell off of the greenback continued despite news of a recent improvement in some U.S. housing data.
As reported at 10:41 a.m. (JST) in Tokyo, the U.S. Dollar Index was trading at 79.759 .DXY, moving well away from June’s 4-month high at 81.020; for the month of June, the Dollar Index had lost nearly 0.7%. The USD/JPY traded at 101.32, close to a 6-week trough while the EUR/JPY edged higher to 138.75 Yen and is now trading up more than 100 pips from June’s low price.
RBA Expectations Keep Aussie Trade Wary
Traders of the Aussie Dollar had been waiting for the Reserve Bank of Australia to confirm consensus expectations that the cash rate would be left unchanged at 2.%. What is more important, though, is whether or not RBA Governor Stevens reiterates the central bank’s belief that the too strong Australian Dollar is detrimental to the Australian economy, which could lead to speculation that the RBA might soon act to weaken the Aussie. The AUD/USD was earlier trading at $0.9432, remaining within striking distance of the $0.94 mark for nearly a month.