Dollar Loses More Steam Ahead Of Busy Week
The U.S. dollar fell further in Asian trading Monday, losing further steam in the wake of Friday’s weaker-than-expected economic-growth number and caution ahead of what is expected to be a busy week of data and monetary-policy decisions.
The ICE dollar index , a measure of the greenback’s moves against six other major currencies, eased to 82.304 from 82.484 in North America on Friday.
The WSJ dollar index , a rival gauge of the currency’s moves against a slightly wider basket, edged down to 73.41 from 73.65.
“Foreign-exchange market activity will remain hesitant ahead of key events this week, but overall, it appears the U.S. dollar will lose further wind out of its sails as U.S. bond yields continue to drop,” said Crédit Agricole head of global foreign-exchange strategy Mitul Kotecha.
The yield on the benchmark 10-year Treasury note dropped 4 basis points to 1.671% on Friday, along with a drop in yields on other longer- and shorter-maturity securities, after data showing the U.S. economy expanded 2.5% in the first quarter, weaker than the 3.2% growth expected by economists.
The coming week will bring another set of key U.S. indicators, including a government report on consumer spending on Monday, the consumer confidence index on Tuesday, monthly trade figures on Thursday, and the crucial non-farm payrolls data for April on Friday. April manufacturing indicators are also set for release from the U.S., China and the euro zone.
Furthermore, the Federal Open Market Committee monetary-policy decision is due Wednesday, while the European Central Bank is expected by many economists to cut interest rates by a quarter-point on Thursday.
Among notable moves, the euro climbed to $1.3051, consolidating gains above the $1.30-level on news from Italy that Prime Minister Enrico Letta and his new cabinet were sworn in on Sunday, despite some reported instances of violence. The common currency was fetching $1.3032 on Friday. Read: Violence mars swearing-in of new Italy government.
Meanwhile, with Japanese stock markets and banks closed for a holiday, the dollar dropped further against the yen. The greenback , which had lost a struggle recently to breach the psychologically important ¥100 level, was buying ¥97.42, down from late Friday’s ¥98.11.
Among other currencies, the British pound was changing hands at $1.5518, rising from $1.5484, while the Australian dollar climbed to $1.0302 from $1.0278.
Marketwatch
