The U.S. dollar scored solid gains against other major currencies on Tuesday, as investors looked ahead to the release of the minutes from the Federal Reserve’s June meeting.
The dollar advanced despite a report released by the Institute for Supply Management showing the pace of growth in the U.S. service sector slowed more than expected in the month of June.
The ISM said its services PMI slid to 60.1 in June from 64.0 in May, although a reading above 50 still indicates growth in the sector. Economists had expected the index to edge down to 63.5.
The dollar index climbed to 92.66 before paring some gains. It was last seen at 92.54, up 0.35% from the previous close.
Against the Euro, the dollar firmed to $1.1825, gaining nearly 0.35%. Survey data from the ZEW – Leibniz Centre for European Economic Research showed that German economic confidence weakened to a six-month low in July
The ZEW Indicator of Economic Sentiment declined sharply to 63.3 in July from 79.8 in the previous month. This was the lowest score since last January, when the score was 61.8 and also below economists’ forecast of 75.2.
The Pound Sterling weakened against the dollar and was fetching $1.3803 a unit a little while ago, about 0.3% less from the previous close of $1.3845.
The Yen firmed to 110.63 a dollar, gaining from 110.97.
The dollar gained against the Aussie, rising nearly 0.5% to 0.7495 a unit of the Australian currency. The Reserve Bank of Australia today maintained its cash rate and the three-year government bond yield target at 0.1%, as expected.
The central bank will retain the April 2024 bond as the bond for the 3-year yield target. The QE programme was extended at a rate of $4 billion a week until at least mid November. The current bond purchase program will end in early September.
The Swiss franc weakened to 0.9244 a dollar, from 0.9221. The Loonie drifted down to C$1.2458 a dollar from C$1.2342 after crude oil prices plunged sharply.