Will the US economy help the greenback?
The United States will release the advance GDP growth rate for the previous quarter on July 30, at 15:30 MT time.
Evergreen buck approaches a 3.5 month maximum
On Monday, the evergreen buck fluctuated below the maximum for three and a half months versus the basket of other key currencies. The revenue of American government bonds headed south after the previous week it had surpassed 3% for the first time for four years.
The US dollar index, used to estimate the purchasing power of the US currency versus six major currencies, jumped by 0.16% ending up with 91.73. That’s the highest reading since January 11.
The previous week, the US dollar index managed to ascend 1.37% due to the surge in revenues of American government bonds as well as the prospects for accelerating the Fed's interest rate lift this year.
A higher interest rate normally appears to be a support for the evergreen buck, as it makes dollar assets more attractive for profit-seeking traders. The greenback soared after the previous week's yield of ten-year US government bonds managed to exceed the psychologically important level of 3% for the first time since 2014 – it strengthened forecasts of inflation surge.
At the time of writing, the revenue of US ten-year bonds inched down and accounted for 2.961%.
The US dollar tacked on versus the Japanese yen. The currency pair USD/JPY rallied by 0.18% hitting 109.25 after on Friday it had ascended to a maximum of two and a half months 109.52.
The volume of trading remains small because the Japanese markets are unavailable for the holiday, while most Asian exchanges are going to be closed on Tuesday.
The common currency went down. The currency pair EUR/USD edged down 0.14% trading at 1.2113, after Friday’s low for three and a half months - 1.2054.
The UK pound kept to a two-month minimum. The currency pair GBP/USD dived 0.18% being worth 109.24 after the resignation of the Home Secretary on Sunday. It heavily undermined the position of Prime Minister Theresa May in the final year of talks on Brexit terms.
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