Greenback broadly stronger Wednesday on renewed hopes for rate hike

Greenback broadly stronger Wednesday on renewed hopes for rate hike

27 May 2015, 16:18
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Dollar remained broadly supported against the basket of other major currencies amid renewed expectations of rate hike in the U.S. this year. Gold touches two-month low.

Reports released on Tuesday indicated that U.S. business investment plans rose, consumer confidence increased and house prices were higher.

The positive data supported the view that the Federal Reserve could start to raise interest rates later in the year if the economy continues to improve as expected.

In Japan, Wednesday’s minutes of the central bank’s April meeting indicated that policymakers pushed back the time frame for achieving its 2% inflation target, spurring hopes for additional monetary easing later in 2015.

USD/JPY was up 0.49% to 123.731 the most since July 2008.

EUR/USD dipped 0.3% to hit one-month lows of 1.0871.

GBP/USD lost 0.27% to trade at 1.5339.

USD/CHF traded at 0.9532.

In the commodity market, gold futures on the Comex for August delivery hit an intraday trough of $1,184.10 a troy ounce, the weakest level since May 12, before settling at $1,186.40 during U.S. morning hours, down $1.30, or 0.11%.

Futures were likely to find support at $1,181.00, the low from May 12, and resistance at $1,208.90, the high from May 26.

Hopes for higher interest rates going are considered bearish for gold, as the metal struggles to compete with yield-bearing assets when rates are on the rise.

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