Forex — Dollar Fight, after the GBP/USD Spikes on Bullish growth data





© Reuters.

Investing.com – The dollar dropped against a basket of major currencies on Wednesday after data showing that new home sales hit a nearly 10-year high was offset by strong gains in sterling in the midst of bullish UK economic growth.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.29% 93.56.

The Commerce Department said on Wednesday non-defense capital goods orders excluding aircraft, accurate proxy for the costs of the company, observed plans, rose by 1.3% last month, beating the forecast of a rise of 1%.

In a separate report, the Commerce Department, sales of existing homes showed increased from 18.9% in September compared to the previous month to a seasonally adjusted annual rate of 667,000 units. Economists in a 0.9% expected decrease of 555,000 homes.

The mood on the dollar, supported by growing expectations that a less quiet Fed would be appointed Chairman, in the midst of several reports suggesting that the Stanford University economist John Taylor impressed US President Donald Trump in his interview with the leadership of the Fed.

Taylor preferred a rule-based approach to monetary policy, which means, given the current level of inflation and economic growth, that the prices should be higher than they are now.

The prospect of more hawkish Fed’s bullish economic data, could not help the dollar losses to shake off against both the pound sterling and the euro.

GBP/USD rose 0.94% to $1.3256 following better-than-expected economic growth data.

EUR/USD rose 0.46% to $1.1818, while EUR/GBP fell 0.50% to £0.8911, as investors searched ahead of the European Central Bank decision on interest rates scheduled for Thursday.

USD/JPY fell to Y113 0.23%.64 while the USD/CAD rose 1% to C$1.2802 as the Bank of Canada interest rates held unchanged on Wednesday.



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