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Dollar continues to add to its longest falling streak since 2011

By on July 31, 2017

The US dollar closed its fifth month in a row with a loss, making it the longest falling streak since 2011.

Jul 31 2017 – Bloomberg

The euro rose above $1.18 for the first time since January 2015, while the greenback lost ground against most of its G-10 peers. Among the risks ahead, the Reserve Bank of Australia will announce a rate decision Tuesday, while the Bank of England will follow Thursday, with markets also bracing for dual U.S. and Canadian employment reports Friday.

While neither the RBA or BOE is expected to change rates this week, traders expect that the Friday employment data could feed into policy considerations at the Fed and the BOC.

The Bloomberg Dollar Spot index declined 0.3% Monday and was on track for a monthly decline of ~2.5%, the steepest drop since January; it remains near the lowest since May 2016.

Anthony Scaramucci was removed from his job as White House communications director, just 10 days after he joined President Trump’s staff; the news came in the New York afternoon as the dollar slowly leaked lower, setting new lows on several fronts, including the euro and yen.

Concerns persist over the progress of Trump administration fiscal policies, while the Fed has acknowledged that inflation remains below its 2% target. Fed Vice Chair Stanley Fischer said in prepared remarks that political and economic uncertainty has contributed to slower growth in the U.S. and around the world. Fischer’s comments were part of a wider diagnosis of why interest rates have remained so low globally.

EUR/USD was trading near a fresh high of 1.1845, testing tech resistance at the Jan. 14, 2015, peak of 1.1846. Earlier price action suggested a scramble to buy EUR as it breached 1.1800, perhaps indicative of stop-loss and stop-entry trades. Talk of stops above 1.1850 is consistent with talk of barrier around that area.

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