The dollar strengthened today against the euro and yen in international currency markets, supported by increased expectations that positive macroeconomic indicators will prompt the U.S. central bank to soon begin reducing monetary stimulus.
The euro weakened 0.2 percent against the dollar, sliding to 1.3308 dollars. The American currency gained value against the yen as well, by 0.4 percent, trading at 96.72 yen per dollar.
The dollar index against a basket of eight major world currencies rose 0.3 percent to 81.408 points.
Market participants emphasize that short-term forecasts for the greenback will depend on U.S. data to be released this week, including retail sales figures. Most analysts expect a strong jump.
“Trading continues at a snail’s pace ahead of tomorrow’s U.S. retail sales report, which will provide traders with better insight into personal consumption at the start of the third quarter,” explains Boris Schlossberg from BK Asset Management.
“If the data shows further weakening, the greenback could weaken again in the short term, as traders begin to doubt that the Fed will actually start reducing stimulus measures in September,” adds Schlossberg.
The U.S. central bank has announced that it could begin reducing monetary stimulus for the economy as early as this year and completely eliminate it next year if economic growth proves sustainable.
The euro was pressured by a report from the German political weekly Der Spiegel that the German central bank warned that Greece would need additional financial assistance no later than the early months of next year. The government in Berlin subsequently denied the claims from the report.
