U.S. Dollar Higher On Fed Rate Hike Prospectus
The U.S. dollar firmed against its most major rivals in the European session on Monday, as the U.S. 10-year treasury yield remained near 7-year highs following a recent run of strong U.S. economic data that bolstered prospect of further rate hikes by the Federal Reserve.
Yields on U.S. 10-year treasury bonds hit a seven-year peak on Friday as recent data showed that the U.S. unemployment rate fell to its lowest since 1969.
The data cemented hopes for a fourth rate hike in December and additional three hikes in 2019.
Investors await reports on U.S. producer and consumer inflation due this week to help shape the pace of Fed tightening.
Economists forecast the CPI to rise 0.2 percent on a monthly basis in September, the same rate as seen in August.
The currency traded mixed against its major counterparts in the Asian session. While it rose against the pound and the euro, it held steady against the franc and the yen.
The greenback edged up to 0.9945 against the franc, from a 4-day low of 0.9907 seen at 3:00 am ET. On the upside, 1.01 is possibly seen as the next resistance for the greenback.
Data from the State Secretariat for Economic Affairs showed that Switzerland's unemployment rate dropped marginally in September.
The unemployment rate dropped to a seasonally adjusted 2.5 percent in September from 2.6 percent in August. The rate matched economists' expectations.
The greenback strengthened to 1.1460 against the euro, a level unseen since August 20. The greenback is seen finding resistance around the 1.13 mark.
Figures from Destatis showed that Germany's industrial production declined unexpectedly in August.
Industrial output slid 0.3 percent from July, confounding expectations for an increase of 0.5 percent. Production had decreased 1.3 percent in July.
Having dropped to an 11-day low of 1.3133 against the pound at 8:15 pm ET, the greenback reversed direction and appreciated to 1.3028. The next possible resistance for the greenback is seen around the 1.29 level.
Quarterly economic survey from British Chambers of Commerce showed that the UK economy is stuck in a rut due to Brexit uncertainties.
In the report, the BCC said there is little to be cheerful about as growth flatlines and business confidence weakens in the third quarter.
The greenback spiked up to a 10-day high of 1.3010 against the loonie and held steady thereafter. The greenback is poised to target resistance around the 1.32 level.
On the flip side, the greenback held steady against the yen, after having declined to an 11-day low of 113.25 at 4:45 am ET. The pair finished Friday's trading at 113.70.