LSE: US Dollar Falls Ahead Of US CPI, FOMC Minutes
CANBERA (Alliance News) - The US dollar weakened against the other major currencies in the early European session on Wednesday, as traders became cautious ahead of US inflation data and the minutes of the US Federal Reserve's latest monetary policy meeting for more clarity regarding the timing for an interest rate hike.
The US labor department is set to publish the consumer prices data for July at 8:30 am ET. Economists expect consumer prices to rise 0.2% on a monthly basis in July, slower than the 0.3% increase in June. On an annual basis, inflation is expected to rise to 0.2% in July from 0.1% in the previous month.
Markets look forward to the release of minutes of the US Federal Reserve's latest monetary policy meeting, due at 2:00 pm ET. The minutes are likely to be closely analyzed for hints regarding whether the Fed will begin raising interest rates at its next meeting in September.
Meanwhile, investors are anxious to see whether the German parliament will vote over a third bailout plan for Greece.
In Asian trading today, the US dollar held steady against the other major rivals.
In the early European trading now, the US dollar fell to a 5-day low of 1.3023 against the Canadian dollar and a 2-day low of 0.9743 against the Swiss franc, from early highs of 1.3065 and 0.9781, respectively. If the greenback extends its downtrend, it is likely to find support around 1.29 against the loonie and 0.96 against the franc.
Against the yen, the euro and the pound, the greenback dropped to 124.20, 1.1075 and 1.5696 from early highs of 124.44, 1.1018 and 1.5651, respectively. On the downside, 123.00 against the yen, 1.12 against the euro and 1.57 against the pound are seen as the next support levels for the greenback.
Pulling away from an early 1-week high of 0.7313 against the Australian dollar, the greenback edged down to 0.7365. The greenback may test support near the 0.75 area.
Looking ahead, US CPI data for July is slated for release in the New York session.
At 2:00 pm ET, the minutes of the US Federal Reserve's July monetary policy meeting is scheduled to be published.
