The greenback snapped its recent losing streak and rebounded against majority of its peers on Friday due to upbeat U.S. data and remarks from Fed's Bullard, who said that the monetary policy may need tightening soon.
Reuters reported U.S. monetary policy is too loose given the country's fast growth, high inflation and an "incipient housing bubble," St. Louis Federal Reserve president James Bullard warned Friday in a call for the central bank to start reducing its monthly asset purchases soon. "We are tilted too much to the dovish side," Bullard said in comments to reporters, urging the Fed to decide at its September meeting on a plan to phase out its $120 billion in monthly bond purchases by the end of March, 2022. "The whole central bank community has been in dovish mode for a long time. If the data shift against us we may have to move quickly and that can be disruptive."
News from Reuters on the data front, U.S. labor costs increased solidly in the second quarter as companies raised wages and benefits to attract workers, supporting views that high inflation could persist beyond this year amid supply constraints. The Employment Cost Index, the broadest measure of labor costs, rose 0.7% last quarter after gaining 0.9% in the January-March period, the Labor Department said on Friday. That raised the year-on-year rate of increase to 2.9%, the largest gain since the fourth quarter of 2018, from 2.6% in the first quarter.
Versus the Japanese yen, dollar extended its recent losing streak to a 9-day low at 109.37 in Asia before rebounding to 109.62 at European open. The pair then found renewed buying at 109.49 in European morning and rose to session highs of 109.82 in New York morning on a rebound in usd together with cross-selling in jpy.
Although the single currency retreated from 1.1894 in Australia to to 1.1876 at European open, price resumed its recent ascent and rose to a 1-month peak at 1.1909 in European morning. However, price then fell to session lows at 1.1852 in New York morning due to broad-based rebound in usd on upbeat U.S. data and due partly to hawkish comments from Fed's Bullard.
The British pound remained under pressure in Asia and retreated to 1.3935 ahead of European open. However, sterling found renewed buying there and climbed to a fresh 1-month peak at 1.3983 in European morning before tumbling to an session lows of 1.3888 in New York on usd's broad-based strength together with cross-selling of sterling especially vs euro.
Data to be released this week :
Australia AIG manufacturing PMI, manufacturing PMI, Japan Jibun Bank manufacturing PMI, consumer confidence, China caixin manufacturing PMI, Germany retail sales, Markit manufacturing PMI, Swiss CPI, retail sales, manufacturing PMI, Italy Markit manufacturing PMI, France Markit manufacturing PMI, EU Markit manufacturing PMI, U.K. Markit manufacturing PMI, Canada market holiday, U.S. Markit manufacturing PMI, construction spending and ISM manufacturing PMI on Monday.
Japan Tokyo core CPI, Australia building permits, RBA rate decision, Swiss consumer confidence, EU producer prices, U.S. redbook, durables ex-defense, durable goods, factory orders, durables ex-transport, Canada Markit manufacturing PMI and New Zealand GDT price index on Tuesday.
Australia AIG construction index, services PMI, retail sales, New Zealand labour cost index, employment change, unemployment rate, Japan services PMI, China caixin services PMI, France budget balance, Markit services PMI, Italy Markit services PMI, retail sales, Germany Markit services PMI, EU Markit services PMI, retail sales, U.K. Markit services PMI, U.S. MBA mortgage application, ADP employment change, Markit services PMI, ISM non-manufacturing PMI and Canada building permits on Wednesday.
Australia trade balance, imports, exports, Germany industrial orders, France industrial output, U.K. Markit construction PMI, BoE interest rate decision, asset purchase program, BoE QE total, BoE QE corporate bond purchases, BoE MPC vote hike, BoE MPC vote unchanged, BoE MPC Vote Cut, U.S. international trade balance, goods trade balance, initial jobless claims, continuing jobless claims, Canada trade balance, exports and imports on Thursday.
Australia AIG services index, Japan all household spending coincident index, leading indicator, Germany industrial output, U.K. Halifax house prices, France current account, Non-Farm payrolls, trade balance, imports, exports, Italy industrial output, U.S. Non-Farm Payrolls, private payrolls, unemployment rate, average earnings, wholesale inventories, wholesale sales, Canada employment change, unemployment change, and Ivey PMI on Friday.
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