The US dollar decreases

13.07.2016

The dollar continued to fall against other major currencies on Wednesday as there are not scheduled publications of significant US data, while investors' attention is entirely focused on the upcoming meetings of the world's Central Banks.

GBP/USD pair is stable at 1.3252, near a two-week high at 1.3336.

Concerns about political instability weakened when it became known that the interior minister, Theresa May, will take the post of Prime Minister of Great Britain.

But the pound remained under pressure in anticipation of the rate cut by the Bank of England.

At its meeting on Thursday the Bank of England may cut interest rates to a new record low and introduce quantitative easing, to protect the economy from the earlier decision to leave the EU.

On Tuesday, the head of the Bank of England, Governor Mark Carney, said that any negative consequences of Brexit for the UK economy may force the central bank to act, reinforcing hopes for additional stimulus measures.

USD/JPY fell 0.27% to 104.42, down from a 2.5-week high of 104.98 the previous session, and USD/CHF fell 0.60% to 0.9832.

The yen reduced losses obtained after the ruling coalition of Prime Minister Shinzo Abe won a landslide victory in elections on Sunday. The coalition victory strengthened hopes for fresh stimulus measures.

The EUR/USD pair rose 0.48% to 1.1114.

AUD/USD pair rose 0.10% to 0.7630, while the NZD/USD pair was stable at 0.7301.

Earlier on Wednesday, official data showed that the volume of China's exports fell in June by 4.8% year on year, while imports fell 8.4%. China is the largest export partner in Australia and the second largest export partner of New Zealand.

USD/CAD fell 0.53% to 1.2975, down from the Monday five-week high 1.3140.

At the end of the meeting to determine the monetary policy, the Bank of Canada left interest rates at 0.50%, which was generally an expected decision.

The report of the Bank of Canada's Monetary Policy said that inflation in Canada may return to the level of 2% in 2017 and the growth should accelerate, although the Brexit effects create some uncertainty and prediction problems.

Market participants are waiting for the press conference of the Bank of Canada later in the trading session.

The USD index, showing the US dollar against a basket of major currencies, was down 0.45% to 96.11.

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