FOREX: Dollar Rises Against Major Trading Partners

FOREX: Dollar Rises Against Major Trading Partners

The US dollar rose against its major trading partners early Tuesday, except for the Canadian dollar, ahead of a busy slate of economic data that includes home price measures for May and the Conference Board’s monthly consumer confidence index for June.

Also scheduled for Tuesday are advance trade data for May, the weekly Redbook same store retail sales, and business conditions readings for June from the Richmond and Dallas Federal Reserve banks.

Data highlights for the rest of the week include gross domestic product growth on Wednesday, personal income and spending on Thursday and the ISM’s manufacturing reading on Friday before another long holiday weekend.

Federal Reserve Chairman Jerome Powell’s testimony last week, as well as other Fed official appearances, served to confirm market expectations that the Fed will continue to push rates higher to fight inflation, with a further 75-basis point increase at the July meeting being priced in by markets.

G-7 leaders continue their summit in Germany on Monday, where capping prices of oil imports is expected to be discussed. A quick summary of foreign exchange activity heading into Tuesday indicates that USDEUR declined only slightly to 1.0578 from 1.0582 at the Monday US close and 1.0584 at the same time Monday morning.

French consumer confidence declined in June according to data released overnight, while German consumer climate hit a record low in July and Italian industrial sales surged in April. The data highlights of the week will be EU unemployment Thursday and inflation Friday.

The European Central Bank’s monetary policy committee meets next July 21 when it is expected to begin its tightening cycle. ECB President Christine Lagarde said earlier Tuesday the ECB will tighten monetary policy faster if needed to combat inflation.

GBPUSD fell to 1.2247 from 1.2266 at the Monday US close and 1.2272 at the same point Monday morning. There are no UK data scheduled for release Tuesday. READ: Dollar Trades Strong Ahead of U.S Inflation Data

UK GDP growth will be released Thursday. The Bank of England is expected to maintain its tightening cycle to tamp down inflation after a 25-basis point increase at the last meeting.

USDCAD fell to 1.2826 from 1.2874 at the Monday US close and 1.2891 at the same point Monday morning. There are no Canadian data scheduled for release Tuesday.

Canada’s GDP growth will be released Thursday. Markets anticipate further monetary policy tightening at the Bank of Canada’s July 13 meeting after June’s 50 basis point increase.

USDJPY rose to 136.2468 from 135.4809 at the Monday US close and 135.3204 at the same time Monday morning. There are no Japanese data on Tuesday’s schedule.

The Bank of Japan has insisted that above-target inflation is temporary and that monetary policy will remain accommodative as a result. # FOREX: Dollar Rises Against Major Trading Partners