Dollar continues rally

dollar, piggy bank, moneyThe Australian dollar has risen amid softer than expected US economic data in the lead up to this week’s US Federal Reserve meeting.

At 0700 AEST on Monday, the local currency was trading at 78.23 US cents, up from 78.10 cents on Friday.

The US dollar is lower against all major currencies ahead of this week’s Federal Reserve meeting, with traders concerned the central bank could be more downbeat about the economy.

BK Asset Management MD, Kathy Lien, said softer US economic data had weakened the greenback.

She cited a slowdown in manufacturing and service sector activity “along with the weakest pace of non farm payrolls growth since December 2013”.

“The big question before us is whether these softer reports will lead to a more dovish Fed statement next week,” Lien said.

She said the greenback could fall further, if the central bank flagged a rate rise in September rather than June.

“If this sentiment makes its way into the Fed statement, the US dollar could extend its slide quickly,” she said.

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