U.S. Dollar Drops Toward Month Low

A gauge of the dollar was set for the lowest close in a month before data this week that may show U.S. manufacturing and new home sales slowed, supporting the case for the Federal Reserve to hold rates near zero.

The greenback headed for quarterly declines versus the majority of its 16 major peers as analysts forecast the U.S. economy shrank more than previously estimated. A measure of volatility for the dollar against the yen held near a record low before Japan’s lawmakers discuss approval of an economic growth plan. Australia’s dollar jumped after a report showed manufacturing in China improved more than economists expected.

“There’s little economic data that’s going to push the U.S. dollar around this week so it’s hard to see catalysts for it to move outside its recent range,” said Joseph Capurso, a Sydney-based currency strategist at Commonwealth Bank of Australia. “Very low interest rates and very large excess liquidity that the big central banks are putting into the global financial system are dampening volatility.”

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.