INGOT Brokers Australia | Fundamental Report (2017-07-17)

Fundamental Report (2017-07-17)

Overview

The greenback fell in Friday’s session pressured by downbeat inflation and retail sales data, the weaker than expected economic data triggered investor to sell the dollar thus driving the greenback to its 10-months low versus a basket of global currencies.

Moreover, economic data in the U.S showed the inflation fell to 1.6% in June compared to a reading of 1.9% in May, thus raising question on the current stance of the Fed who seem set on further rate hike according to Fed Chair Janet Yellen testimony, the Chair suggested that Federal Reserve would continue to gradually hike its interest rate this year.  

Meanwhile, retail sales also show downbeat results for the second consecutive reading; Retail sales fell by 0.2% missing analyst’s forecasts of a 0.2% increase. The disappointing data added to the negative sentiment on the American economy.   

The US Dollar Index, which measures the strength of the US Dollar against a basket of major currencies, the greenback tumbled by 0.65% to settle at 95.13 to hit its 10-month lows.  

The Great British Pound expanded its gains for the third session on Friday amid weakness in the dollar; the Cable a surged by more than 1% to trade at 1.3096 to hit a 10-month high.

Meanwhile, the European Euro continued its dominance versus the dollar to settle higher by 0.63% to trade at slightly lower at 1.1468 after the greenback dropped due uncertainty regarding inflation growth in the U.S  affected by the mixed inflation data from across the European Union and the marginally stronger US Dollar.

Furthermore, in Japan, the Japanese Yen strengthened against its dollar counterpart, where the US Dollar denominated currency dropped by 0.66% to settle at 112.52 the yen was supported by high demand for the safe heaven assists amid rising US political concerns.

Commodity Based currencies witnessing relatively large gains in Friday’s session, as both the Australian and New Zealand Dollars outmuscled their US counterpart, with the Australian Dollar gaining versus the greenback for the the sixth trading session in a row due to rising commodity prices and improving economy, The AUD/USD rose by 1.2% to trade near 16 month highs at 0.7829, while the New Zealand Dollar traded near four months higher to settled at 0.7346 reaching session highs of 0.7364.

Oil dependent currency Canadian Dollar extended on its gain versus the greenback as the commodity highly dependent currency was supported by the rise in Oil prices along with the Bank of Canada increasing its interest rate from 0.50 percent to 0.75 percent.

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