Euro Firms; U.S. Dollar Slips As Fed Rate Hike Concerns Recede
The euro climbed against its major counterparts in the European
session on Monday, while the U.S. dollar dropped, as markets
trimmed expectations of a larger Fed rate hike and China's central
bank affirmed a stronger support to the economy, helping lift
Investors expect a 75 basis-point rate hike from the Fed at its
meeting due next week after several policy makers rejected the
possibility of a 100 basis-point move.
The European Central Bank will announce its decision on
Thursday, when it will deliver a 25 basis-point rate hike amid a
The ECB is expected to unveil details of the new tool aimed to
ease pressure on borrowing costs for the bloc's indebted
Also in focus is the resumption of gas supplies through the Nord
Stream 1 pipeline, which is scheduled to stop maintenance on
The euro appreciated to 1-week highs of 1.0175 against the
greenback and 0.9916 against the franc, off its early lows of
1.0079 and 0.9837, respectively. The euro is seen locating
resistance around 1.08 against the greenback and 1.05 against the
The euro touched 140.65 against the yen, its strongest level
since July 5. On the upside, 143.00 is likely seen as its next
The euro rose to 4-day highs of 1.3193 against the loonie and
1.6451 against the kiwi, reversing from its early 4-day low of
1.3103 and a 2-1/2-month low of 1.6302, respectively. The euro is
poised to find resistance around 1.35 against the loonie and 1.69
against the kiwi.
The euro bounced off to 1.4870 against aussie, from its Asian
session's 4-day low of 1.4814. The euro may find resistance around
the 1.50 level.
In contrast, the euro was down against the pound at 0.8471. If
the currency falls further, it is likely to test support around the
The greenback dropped to a 4-day low of 137.89 against the yen
and a 1-week low of 1.1991 against the pound, from its previous
highs of 138.57 and 1.1863, respectively. The next possible support
for the greenback is seen around 120.00 against the yen and 1.26
against the pound.
The greenback eased from its prior highs of 1.3025 against the
loonie and 0.6784 against the aussie, falling to a 4-day low of
1.2964 and a 1-week low of 0.6843, respectively. Should the
greenback falls further, it is likely to test support near 1.26
against the loonie and 0.70 against the aussie.
On the other hand, the greenback edged up to 0.9788 against the
franc, from a 10-day low of 0.9732 seen at 6:15 am ET. Next near
term resistance for the currency is seen around the 1.00 level.
The greenback recovered to 0.6155 against the kiwi, after
dropping to a 10-day low of 0.6201 at 9:15 pm ET. The greenback is
likely to find resistance around the 0.59 level.
U.S. NAHB housing market index for July is scheduled for release
in the New York session.
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