Dollar pares initial gain on weakness in global stocks
The greenback pared its initial gains and retreated later in Europe and New York on risk aversion due to the retreat in global stocks.
The single currency continued its recent descent and dropped to a fresh 2-month trough at 1.2664 in Asia. Later, euro pared its losses and rose to 1.2698 in early European morning on dollar's broad-based weakness and then higher to session high at 1.2715 at New York open. However, the pair came under renewed selling pressure and dropped again to 1.2678.
Versus the Japanese yen, the greenback traded with a firm undertone in Asia and rose to a fresh 6-year peak at 109.75 ahead of European open, however, dollar pared its gains and dropped to session low at 109.13 in New York morning on dollar's broad-based retreat. Later, the pair staged a recovery to 109.51 in New York afternoon before stabilizing.
The British pound dropped to session low at 1.6210 in New Zealand and continued to remain under pressure till European open. However, the pair found some support and rebounded to 1.6262 in early European morning and then higher to 1.6275 in New York morning before retreating again.
In other news, Fed's Evans said 'we getting closer to the date when policy normalization will come about; we'll take stronger dollar into account in the way it affects trade n inflation; sees appropriate first rate hike in first quarter 2016; wud not be calling for overshooting on inflation if unemployment were below 5%; in current environment wud be beneficial to put 2-year deadline on reaching 2% inflation.'
On the data front, Germany CPI m/m n y/y came in as expected at 0.0% n 0.8% respectively. U.S. pending home sales came in weaker-than-expected at -1.0% vs forecast of -0.1%.
Data to be released on Tuesday:
Japan unemployment, household spending, industrial output, retail sales, New Zealand RBNZ business outlook, China manufacturing PMI, Germany retail sales, unemployment, UK consumer confidence, house prices, GDP, France producer prices, Swiss KOF indicator, Italy unemployment, CPI, EU inflation, Canada GDP, producer prices, U.S. redbook retail sales, caseshiller house prices, Chicago PMI and consumer confidence.
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