Dollar index hits 10-month low on Fed bets, strong China data
The U.S. dollar hit its lowest level against a basket of major currencies in 10 months on Monday and the Australian dollar hit a more than two-year high on strong Chinese economic data and doubts that the Federal Reserve would raise interest rates again this year.
China`s second-quarter gross domestic product topped forecasts with a rise of 6.9 percent on the year, while retail sales and industrial output from the world`s second-largest economy were both strong.
The data boosted the Australian dollar given the country`s trade relationship with China, analysts said. The Aussie shot to a more than two-year high of $0.7840
The dollar hit more than two-week lows against the onshore and offshore yuan, respectively, of 6.7645 yuan
The dollar index, which measures the greenback against a basket of six major rivals, touched its lowest since last September of 95.018 <.dxy>. While it was last flat on the day at 95.149, it was not far from that 10-month trough.
Against the Mexican peso, the dollar hit 17.5340 pesos
"The better-than-expected China data has been supportive for emerging markets" and the Australian dollar, said Sireen Harajli, FX strategist at Mizuho in New York.
Expectations for another Fed rate hike this year have been pared to less than a 50-percent probability after the latest U.S. inflation print on Friday.
With no top-tier data this week, markets have plenty of time to mull the repeated disappointment on inflation, which has cast a question mark over the Fed`s confidence that prices would soon rebound.
"The markets are not convinced the Fed is going to be tightening rates anytime soon," said Vassili Serebriakov, FX strategist at Credit Agricole in New York. "In that kind of an environment, the dollar is struggling."
The euro was last up 0.1 percent against the dollar at $1.1479
The dollar traded slightly higher against the yen at 112.61 yen after touching a nearly two-week low against the Japanese currency on Friday of 112.24 yen
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)