12th Sep 2016 17:57
WASHINGTON (Alliance News) - The dollar is trading slightly lower against all of its major rivals Monday afternoon. There has been little global economic data to drive trading at the start of the week, which has left investors focused on the outlook for US interest rates.
Hawkish comments from Boston Federal Reserve President Eric Rosengren last Friday brought concerns about a near term rate hike back to the forefront. The outlook for interest rates remains uncertain heading into the Fed meeting next week. Traders will be keeping a close watch on US economic data this week, especially the reports on retail sales, industrial production and consumer price inflation.
Investors are also looking forward to the Bank of England meeting on Thursday and the upcoming BOJ meeting to see whether central banks have room for further stimulus measures should economic conditions deteriorate. The dollar rose to a high of USD1.1209 against the Euro Monday, but has since pulled back to around USD1.1240.
The Bank of England is unlikely to cut its key interest rate on Thursday, after reducing it to a record low last month, as recent data suggested that the economy is set to escape a recession after the initial 'Brexit' shock.
The Monetary Policy Committee is expected to hold its key bank rate at 0.25% and the quantitative easing at GBP 435 billion in the policy meeting on September 15.
The British Chambers of Commerce downgraded its growth projections for the UK, citing weak consumer spending and a large reduction in investment.
Despite issues surrounding the Brexit, the UK is expected to skirt with, but avoid, recession, the business lobby said in its economic forecast released Monday.
The BCC forecasts the economy to grow 1.8% this year instead of 2.2%. The sequential growth in the third and fourth quarters of 2016 is forecast to slow down to 0.1% each.
The projection for 2017 was trimmed to 1% from 2.3%. If the forecast for 2017 is realized, it would be the weakest rate of growth since 2009, the lobby noted.
The 2018 outlook was downgraded to 1.8% from 2.4%. The buck reached an early high of USD1.3232 against the pound sterling Monday, but has since retreated to around USD1.3340.
The greenback has dropped to around Y101.650 against the Japanese Yen this afternoon from last Friday's high of around Y103.
Core machine orders in Japan jumped 4.9% on month in July, the Cabinet Office said on Monday - coming in at 891.9 billion yen. The headline figure beat forecasts for a decline of 2.9% following the 8.3% spike in June.
Producer prices in Japan were down 0.3% on month in August, the Bank of Japan said on Monday. That was shy of forecasts for a decline of 0.1% following the flat reading in July.
Copyright RTT News/dpa-AFX