Dollar increases due to fresh hopes for an early rise in interest rates

17.08.2016

On Wednesday, the dollar rebounded from a seven-week low from the previous session as the comments of the Fed officials provoked fresh hopes for a rate hike in the US next month.

EUR/USD fell 0.12% to 1.1265, retreating from a seven-week peak 1.1324 on Tuesday.

The dollar maintains after on Tuesday, the head of the Federal Reserve Bank of New York, William Dudley, said the Fed may raise interest rates already at its September meeting.

In addition, the President of the Federal Reserve Bank of Atlanta, Dennis Lockhart, said on the possibility of two rate increases in 2016.

GBP/USD fell 0.22% to 1.3017, approaching to one-month low of 1.2862.

The markets ignored the report of the Office for National Statistics which showed that the unemployment rate in the UK was 4.9% for the three months to June, which corresponds to the forecast.

The number of applications for unemployment benefits unexpectedly fell in July by 8600, against the expected increase by 9500, after rising 900 a month earlier, the figure being revised upward from400.

Meanwhile, the average wages, excluding bonuses, rose in the three months to June by 2.4%, matching forecasts, after increasing by 2.3% in the three months to May.

USD/JPY rose 0.45% to 100.75, retreating from the previous session low at 99.52, while USD/CHF added 0.18% to 0.9624.

The Australian and New Zealand dollars weakened: AUD/USD fell 0.81% to 0.7632 and NZD/USD pair fell 0.70% to 0.7234.

Earlier on Wednesday, statistics of New Zealand reported that the number of employees increased in the second quarter by 2.4%, exceeding expectations for a 0.6% increase.

The unemployment rate fell in the second quarter to 5.1% from 5.7% in the first quarter, while there was expected a decline to 5.3%.

USD/CAD rose 0.35% to 1.2907, rebounding from a six-week low at 1.2793 on Tuesday.

Commodity currencies are also under pressure due to the sharp fall in oil prices on expectations of "bearish" US inventory data.

The USD Index, which tracks the greenback against a trade-weighted basket of six major rivals, rose 0.21% to 94.95.

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