Dollar Declines As Strong European Data Boosts Euro
September 22 2017 - 11:41AM
Dow Jones News
By Daniel Kruger
The dollar fell Friday as strong economic data from the eurozone
turned the attention of investors toward the prospect of tighter
monetary policy for the region.
The WSJ Dollar Index, which measures the U.S. currency against
16 others, fell 0.2% to 85.45, amid losses against the euro. The
dollar after slipped less than 0.1% Thursday.
European manufacturers had their strongest output gains since
April 2011, while services also gained, according to preliminary
Purchasing Managers index data compiled by IHS Markit.
"The issue of the eurozone economy picking up relative to the
U.S. is compelling," said Shaun Osborne, a currency strategist at
Scotiabank in Toronto.
The euro was recently up 0.2% against the dollar at $1.1963.
While the Federal Reserve indicated it is on track raise rates
again this year and announced a schedule for reducing its $4.2
trillion of bonds accumulated in the wake of the financial crisis,
the prospect of a turn away from stimulus by the European Central
Bank remains more attractive to investors. The ECB is currently
buying EUR60 billion a month in bonds.
Expectations for higher interest rates make assets denominated
in that currency more attractive to yield-seeking investors.
Markets are now pricing in a roughly 78% chance that the Fed
will raise rates again this year, up from 53% a week ago, according
to CME Group data.
Write to Daniel Kruger at Daniel.Kruger@wsj.com
(END) Dow Jones Newswires
September 22, 2017 12:26 ET (16:26 GMT)
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