US data weakens dollar

 

money, dollar, financeThe Australian dollar is slightly lower amid more signs the US economy is improving.

At 0700 AEST on Wednesday, the local unit was trading at 93.85 US cents, down from 93.96 cents on Tuesday.

US consumer confidence has risen for the third month in a row, hitting its highest level in almost seven years.

RBC senior currency strategist Greg Moore said the data helped strengthen the US dollar, which prevented the Australian dollar from making any gains.

“Broad US dollar strength was the dominant theme in foreign exchange markets overnight,” he said.

“A solid US consumer confidence report helped the US dollar make some sizeable moves against the rest of the majors.”

The consumer confidence index rose to 90.9 in July, up from 86.4 in June and much stronger than the 85.6 per cent reading analysts expected.

The US dollar was also rising as traders positioned themselves for what is expected to be an improvement in the June quarter gross domestic product (GDP) figures to be released on Wednesday night, Australian time.

The American economy contracted by 2.9 per cent in the March quarter but most forecasters expect a bounce in the June quarter GDP.

Markets are also awaiting the outcome of the US Federal Reserve policy meeting which ends early on Thursday morning (AEST).

The Fed is widely expected to taper is bond purchases by another $US10 billion a month and to upgrade economic growth forecasts.

AAP

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