Dollar drops to one week lows on the market sentiment improvement

23.07.2015

On Thursday, the dollar fell to one-week lows against a basket of major currencies, as market sentiment improved after Greek lawmakers voted on Wednesday in favor of the second part of key reforms, clearing the way for a third bailout package.

The EUR/USD rose 0.60% to one-week high of 1.0994 after Wednesday night, the majority of Greek lawmakers voted for the second part of the reform, getting a basis for the continuation of negotiations on a new bailout program in the size of 86 billion euro. The country is trying to have an agreement by the middle of next month.

Recent measures, for which the Greek parliament voted, include changes in the banking system and a major reform of the judicial system.

For the first part of the austerity measures required by creditors, Greece voted last week. These included economic reforms and budget cuts needed to continue talks on the country's bailout provision.

Earlier on Thursday, data showed that unemployment rate in Spain dropped to 22.37% in the second quarter, from 23.78% in the first one.

The pound is stable; GBP/USD pair is traded at 1.5609 after data showed that retail sales fell last month by 0.2%, confounding forecasts of a 0.3% rise. In May, retail sales increased by 0.3%, whose figure was revised from a gain of 0.2%.

In annual terms, retail sales rose in June by 4.0%, lower than the expected growth of 4.9%, after rising 4.7% in May.

The base index of retail sales, which excludes the volume of car sales, fell last month 0.2% compared to forecasts rise of 0.3%, after rising 0.4% in May.

However, the pound was supported after last week's Bank of England Governor, Mark Carney, hinted on the future plans of the Central Bank, saying that the decision to raise interest rates from record lows will be seen more probable around the end of 2015.

Dollar falls against the yen and Swiss franc; USD/JPY lost 0.11% to 123.83, and the pair USD/CHF has weakened 0.48% to 0.9554.

Dollars of Australia and New Zealand know an increase; AUD/USD rose 0.43% to 0.7407, and the pair NZD/USD soared 1.57% to 0.6680.

Earlier, the National Bank of Australia said that its index of business confidence rose in the second quarter to 4, from 0 in the first one.

Meanwhile, the USD/CAD pair fell 0.41% to 1.2981, pulling away from a six-year peak of 1.3055.

The USD index, which measures the greenback against a basket of six major currencies, went down 0.49% to 97.14, the lowest level since July 15.

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