Greenback regains ground on China selloff; FOMC meeting looms

Greenback regains ground on China selloff; FOMC meeting looms

28 July 2015, 10:48

The dollar moved higher against the euro and the yen on Tuesday ahead of the start of the Federal Reserve’s two day policy setting meeting later in the trading day.

EUR/USD hit 1.1056 during European morning hours, off Monday’s two-week highs of 1.1128. The pair subsequently consolidated at 1.1064, lower 0.21%.

GBP/USD was last at 1.5569, higher 0.06%.

The dollar regained ground on a lingering selloff in Chinese equity markets.

Traders continued to watch action in China, a day after the Shanghai Composite Index dropped 8.5%, for its biggest decline in more than eight years. On Tuesday the benchmark regained ground trading 1.70% lower.

European stocks were mostly higher Tuesday with the Stoxx Europe 600 gaining 0.4% to 387.51 - recovering a little from Monday’s 2.2% drop.

Germany’s DAX 30 rose 0.4% to 11,096.56, while France’s CAC 40 gained 0.4% to 4,947.29, still trading below the 5,000 level. The U.K.’s FTSE 100 added 0.5% to 6,536.06.

Investors now await Wednesday’s Fed statement to see if officials will provide any hint on the timing of an initial rate hike.

Another highly-watched data includes figures on second quarter growth due on Thursday, which are expected to show that the economy rebounded following a contraction in the first quarter following in unusually harsh winter.

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