Dollar ends firm ahead of Fed's 2-day monetary policy meeting

Market Review - 17/06/2019  23:39GMT  

Dollar ends firm ahead of Fed's 2-day monetary policy meeting

The greenback ended with a firm undertone against majority of its peers on Monday after intra-day brief retreat on weak New York manufacturing index which suffered a steepest one-month fall on record, however, renewed buying emerged and lifted dollar. Price later moved sideways versus G4 currencies and gained against sterling where the pound tumbled to 5-1/2 month lows on market speculation of a no-deal Brexit.  
  
Reuters reported the New York Federal Reserve said on Monday its gauge of business growth in New York state posted a record fall this month to its weakest level in more than 2-1/2 years, suggesting an abrupt contraction in regional activity.  
The regional Fed's "Empire State" index on current business conditions tumbled to -8.6 in June from 17.8 in May. This was the first negative reading since October 2016 when it was -9.2.  Analysts polled by Reuters had forecast a reading of 10.0 for March.  
  
Versus the Japanese yen, although the greenback gained to 108.70 in Asian morning due to rise in U.S. Treasury yields, then marginally higher to session highs at 108.72 ahead of European open, price pared its gains and dropped at New York open on the back of weak U.S. data to 108.52 in New York as well as renewed safe-haven yen buying, price last traded at 108.55 near the close.  
  
The single currency traded with a firm bias and gained to 1.1224 in Asian morning before dropping to session lows at 1.1205 in early European morning. However, failure to penetrate Friday's low at 1.1203 triggered short-covering and price rallied to 1.1246 at New York open on usd's weakness together with cross-buying in euro vs sterling. Later, price pared its gains and retreated to 1.1215 in New York afternoon.  
  
The British pound traded sideways in Asia before retreating to 1.2572 in early European morning and then staging a rebound to 1.2606 at New York open on usd's weakness. However, cable met renewed selling there and dropped to a 5-1/2 month low at 1.2532 in New York afternoon on increased market concerns of a no-deal Brexit after Boris Johnson got a boost in his bid to replace PM May.   
In other news, Reuters reported Dominic Raab, a candidate to replace British Prime Minister Theresa May, said on Monday he was "quietly confident" of going through to the next round of a Conservative Party leadership contest.  
Speaking to journalists at a hustings in Westminster which frontrunner Boris Johnson declined to attend, Raab voiced optimism that he could make it through the second round of voting by Conservative lawmakers which is due to take place on Tuesday.  
  
Data to be released on Tuesday :  
  
New Zealand Consumer survey, China House price, Australia House price, Germany ZEW economic sentiment, current conditions, EU trade balance, HICP, core HICP, ZEW economic sentiment, U.S. building permits, housing starts, redbook retail sales and Canada manufacturing sales.