The U.S. dollar stayed largely subdued on Monday, with traders looking ahead to the upcoming monetary policy meetings of the European Central Bank and the Federal Reserve.
With recent data on U.S. jobs turning out to be a bit weak, and the impact of the ongoing trade war between the U.S. and China continuing to hurt growth, it is widely expected that central banks across the globe will step up stimulus to support growth.
The U.S. Federal Reserve reiterated recently that it would “act as appropriate” to support economic expansion. The ECB, as well, hinted at additional stimulus.
The ECB’s policy move will be know this Thursday, while the Fed is scheduled to announce its policy next week.
The dollar index, which declined to a low of 98.14 a little past noon, recovered some lost ground subsequently and was last seen at 98.32, down 0.08% from previous close.
Against the euro, the dollar was down 0.15%, at 1.1047, even as a survey from behavioral research institute Sentix said the assessment of the current situation suggested that a recession is imminent.
Meanwhile, Germany’s exports increased in July, while imports decreased from the previous month, raising hopes that foreign trade contributed positively to economic growth at the start of the third quarter.
The pound sterling was up nearly 0.5% against the dollar with a unit of sterling fetching $1.2343, compared to $1.2285 on Friday.
Data released by the Office for National Statistics today showed the UK economy expanded in July, largely driven by a rebound in services. The report said GDP expanded 0.3% in July, after staying flat in June. Economists had forecast marginal growth of 0.1%.
July’s surprisingly strong rise in GDP suggests that the U.K. has not fallen into a recession.
The dollar was up nearly 0.3% against the Japanese currency, with a unit fetching 107.23 yen, up from 106.92 yen late Friday.
The dollar was down marginally against the loonie at 1.3165, due largely to higher crude oil prices.
Against the Aussie, the dollar shed about 0.25% trading at 0.6863. Against Swiss franc, the dollar gained nearly 0.5%, at 0.9921.
In U.S. economic news today, a report released by the Federal Reserve said consumer credit surged up by $23.3 billion in July after climbing by a downwardly revised $13.8 billion in June.
Economists had expected consumer credit to jump by $16.0 billion compared to the $14.6 billion increase originally reported for the previous month.
The bigger than expected increase in total consumer credit reflected notable growth in both revolving and non-revolving credit.
Compared to the same month a year ago, consumer credit in July was up by 6.8%, as revolving credit spiked by 11.2% and non-revolving credit increased by 5.3%.
The material has been provided by InstaForex Company – www.instaforex.com