U.S. Dollar Falls Against Majors
Brussels (Sept 23) The U.S. dollar weakened against its major counterparts on Tuesday, as U.S. treasury yields fell amid bargain hunting, as well as on expectations that the U.S. Federal Reserve would not raise rates quickly given the recent weak economic data.
The 10-year Treasury yield fell 0.76 percent to 2.547 percent, while yields on 30-year Treasuries were at 3.271 percent, a 0.54 percent decrease. The yield falls when bond prices rise.
Data from the National Association of Realtors showed that U.S. existing home sales fell unexpectedly by 1.8 percent in August, halting four months of gains.
According to a report from Chicago Federal Reserve, manufacturing activity in the U.S. weakened in August, with the national activity index based on a survey declining to -0.21 in the month from a positive reading of 0.26 in the previous month.
Last week, the Fed reiterated its pledge to keep interest rates at near-zero for a extended period after its bond-buying program ends. However, the Fed also hinted that monetary tightening will be less gradual once underway.
The greenback was higher against most major currencies in New York trading on Monday, as the U.S. Fed Reserve projected a faster pace of rate increases, when it starts tightening by next year.
The greenback fell to 4-day lows of 0.9361 against the franc and 1.2895 against the euro, compared to Monday's closing quotes of 0.9397 and 1.2846,respectively. The next possible downside target for the greenback lies around 0.93 against the franc and 1.30 against the euro.
The greenback slipped to a 6-day low of 108.24 against the yen, retreating from a high of 108.85 hit around 6:00 pm ET . Continuation of downtrend may push down the dollar to a support around the 107.00 zone.
The greenback reversed from an early high of 1.6302 against the pound, falling back to a 4-day low of 1.6399. If the greenback continues its slide, it may test support around the 1.65 mark.
Looking ahead, Canadian retail sales and U.S. house price index for July are due in the New York session.
Source: RTTnews
