(MENAFN- Daily Forex) The US Dollar weakened firmly yesterday, trading at a 2-month low against the Euro, Swiss Franc, British Pound, and New Zealand Dollar.
The US Dollar has weakened notably over the past day, with the US Dollar
index reaching a 7-week low. Several major currencies have reached even longer-term highs against the greenback, mostly in Europe, particularly the GBP/USD , EUR/USD , NZD/USD , and USD/CHF currency pairs. The Dollar's fall is seen as having been triggered by yesterday's lower than expected US consumer data, as well as last Friday's lower than expected Core PCE Index data which is a key inflation metric for the Federal Reserve. Markets are now expecting the Fed to begin cutting rates at its September meeting.
In the Forex market, the strongest major currency since the Tokyo open is the British Pound, while the Australian Dollar is the weakest major currency. The Japanese Yen remains relatively weak, with strong currencies advancing against it over the course of today, notably the NZD/JPY cross which traded earlier at a new 17-year high price. Looking for long trades in European currencies against the Yen could be a good strategy today.
Although India's government, led by Prime Minister Narendra Modi, was re-elected for a third consecutive governing term, the size of his majority is considerably lower than was originally expected, leading to the Indian Nifty 50 equity index and the Indian Rupee giving up most of their recent gains, sending the USD/INR currency pair shooting up strongly.
The precious metal Silver has bounced higher after testing the pivotal support level yesterday at $29.85. Trend traders will still be interested here on the long side.
Yesterday's releases of US Final Manufacturing PMI and ISM Manufacturing PMI data were weaker than expected, suggesting a cooling US economy.
Japanese Finance Minister Suzuki admitted that the Bank of Japan intervened to prop up the Yen, claiming success now that the US Dollar's weakening has sent the USD/JPY currency pair notably lower.
Swiss CPI data due today is expected to show inflation is holding steady at a monthly rate of 0.3%.
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