Forex - Dollar remains near 13-month highs, eyes on U.S. data

Shutterstock photo - - The dollar edged lower against a basket of other major currencies on Wednesday, but still remained within close distance of a 13-month high as markets eyed the release of upcoming U.S. economic reports on Thursday and Friday.

In a report, the U.S. Census Bureau said factory orders rose 10.5% in July, slightly below expectations for an increase of 11%, after a revised 1.5% rise in June.

The greenback remained supported after strong U.S. factory data on Tuesday added to the view that the economic recovery is gaining momentum.

Investors were looking ahead to the latest U.S. employment report, due for release on Friday, for further indications on the strength of the recovery in the labor market, a key factor in deciding the future path of monetary policy.

EUR/USD was steady, near 1-year lows at 1.3142 amid mounting expectations that the European Central Bank will announce quantitative easing measures as a way to shore up growth after the annual rate of euro area inflation slowed to a five year low last month.

Data earlier Wednesday showed that activity in the German and French service sectors slowed in August, while Italy's service sector contracted, adding to pressure on the bank to act.

A separate report showed that euro zone retail sales fell 0.4% in July, in line with forecasts.

Elsewhere, GBP/USD was little changed, near five-month lows at 1.6458 despite data showing that the U.K. service sector expanded at the fastest rate since November last month.

The dollar pulled away from seven month highs against the yen, with USD/JPY slipping 0.15% to 104.93, while USD/CHF remained close to 10-month highs at 0.9188.

AUD/USD climbed 0.74% to 0.9343 after data showed that Australia's grew 0.5% in the second quarter, exceeding expectations for 0.4% growth. In the first quarter, Australia's GDP expanded by 1.1%.

On a year-on-year basis, Australia's economy grew 3.1% in the three months to April, compared to expectations for 3.0% growth.

In addition, Reserve Bank of Australia Governor Glenn Stevens signaled earlier at a conference that interest rates are likely to remain unchanged for an extended period of time.

Elsewhere, the New Zealand dollar hovered near six-month lows, with NZD/USD at 0.8322. USD/CAD fell 0.35% to trade at 1.0990 after the Bank of Canada left its benchmark interest rate unchanged at 1% and said it was neutral about its next policy rate move.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.08% to 82.93, still close to a 13-month high of 83.07 hit earlier in the session. offers an extensive set of professional tools for the financial markets.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Forex and Currencies

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