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Dollar struggles near 10-month lows, sterling slips By Tradebuddy.online

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© Reuters. Dollar wallows near 10-month lows, sterling hit by Brexit fears

Tradebuddy.online – The dollar was wallowing near 10-month lows on Monday after data showing that China’s economy gained momentum in the second quarter amid lingering doubts over the Federal Reserve’s plans to raise interest rates again this year.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, ticked up 0.11% to 94.99 by 06.13 a.m. ET (10.13 a.m. GMT).

The index touched a 10-month low of 94.86 overnight after falling 0.69% on Friday.

China reported overnight that expanded by an annualized 6.9%, driven by strong retail sales, industrial output and exports.

The data brightened the outlook for global growth because China is the world’s second largest economy.

was last at 112.43 after falling to a two-week low of 112.31 overnight.

The dollar weakened broadly on Friday after added to doubts over the Fed’s plans for a third rate hike this year.

The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year but the sluggish inflation outlook has raised questions over whether officials will be able to stick to their planned tightening path.

The euro was a touch lower against the dollar, with slipping 0.1% to 1.1456, still within striking distance of the 14-month high of 1.1488 set last Wednesday.

Sterling moved lower, with down 0.26% to 1.3066 amid concerns over heightened political uncertainties and the potential impact of Brexit as in Brussels.

The pound rallied 1.2% against the dollar on Friday, its largest one-day percentage gain in three months to a high of 1.3093.

The Australian and New Zealand dollars were slightly lower, with pulling back to 0.7822 from the 15-month high of 0.7832 set overnight as the upbeat Chinese data bolstered inflows into higher yielding assets.

slid 0.2% to 0.7331 after rising as high as 0.7361 earlier.

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Forex

USD/CAD flirting with lows, around mid-1.2700s

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   •  Extends overnight retracement on renewed USD weakness.
   •  Surging crude oil prices aggravating selling pressure.
   •  US durable goods/FOMC minutes eyed for fresh impetus.

The USD/CAD pair extended overnight retracement from 2-1/2 week tops and is currently placed at the lower end of its weekly trading range, around mid-1.2700s.

On Tuesday, the pair touched an intraday high level of 1.2837 but failed to build on the up-move amid some renewed US Dollar selling pressure. Traders even shrugged off an unexpected decline in the Canadian wholesale sales and better-than-expected existing home sales data from the US, with sliding US Treasury bond yields prompting some fresh US selling.

With the greenback holding weaker, a strong rally in crude oil prices underpinned the commodity-linked currency – Loonie and continued weighing on the major for the second consecutive session on Wednesday. Oil prices rose sharply on Canadian pipeline disruption to the United States, which added to the positive news of a fall in the US crude oil inventories and prolonged OPEC-led production cut. 

Later during the NA session, the US economic docket, featuring the release of durable goods orders and weekly crude oil inventories, would now be looked upon for some immediate respite for the USD bulls. The focus, however, would be on the FOMC meeting minutes, which would drive the buck in the near-term and provide some fresh directional impetus. 

Technical levels to watch

A follow-through weakness below mid-1.2700s is likely to get extended towards the 1.2700 handle before the pair eventually drops to test 1.2670-60 strong horizontal support.

On the upside, 1.2770-75 area now seems to act as an immediate resistance, above which the pair is likely to move past the 1.2800 handle and retest 1.2835 supply zone. 
 

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Forex

iFOREX Daily Analysis : November 01,2017

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iFOREX Daily Analysis : November 01,2017

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