U.S. dollar steadies near six-month highs ahead of major economic data and Fed

ecPulse
2014-07-28 19:50PM UTC

Although still hovering around six-month highs, the U.S. dollar stabilized against most major currencies on Monday, taking a slight pause from the strongest gain since March as investors awaited a number of key economic data and policy releases.

The dollar fell slightly against the euro but still traded near eight-month highs against the single currency ahead of Wednesday`s release of U.S. second-quarter gross domestic product growth and a Federal Reserve policy announcement.

Economists believe U.S. Gross Domestic Product (GDP) grew 3% in the second quarter after a heavy contraction of 2.9% in the first quarter. As for the July jobs report, forecasts are calling for around 235,000 payroll additions.

The EUR/USD last traded at 1.34312, up 0.02% for the day, after hitting 1.34202 on Friday, the lowest since November 21.

Investors look forward to the Federal Reserve’s policy meeting in anticipation for hints of a more hawkish decision or guidance after a two-day policy meeting ends on Wednesday.

Stronger-than-expected U.S. data on services sector activity on Monday had little impact on major currencies. Financial data firm Markit said its preliminary services Purchasing Managers Index was 61.0 in July, unchanged from June and above expectations for a reading of 59.8.

The National Association of Realtors (NAR) said Monday that contracts to buy previously-owned U.S. homes unexpectedly fell in June. NAR`s Pending Home Sales Index, based on contracts signed last month, fell 1.1 percent to 102.7 and confounded economists` expectations for a 0.5 percent gain.

The dollar was last up just below 0.1 percent against the Japanese yen at 101.862, and was up against the Swiss franc at 0.90428 franc.

The U.S. dollar index, which tracks the value of the dollar versus a basket of six major currencies, was last flat at 81.03 after earlier hitting a low of 80.97.

U.S. government bond yields stabilized after dropping on Friday, with the 10-year U.S. Treasury note yielding 2 basis points at 2.485%.

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