Dollar recovers on back of positive economic data

Published: 26 Jun at 9 AM Tags: Euro, Dollar,

The dollar index has risen from a low of 82.241 to 82.680. The 0.4 per cent recovery came on the back of positive data coming out of the US that shows a rise in the price of housing and solid business spending. If the recovery continues Ben Bernanke, Chairman of the Federal Reserve, has said that the pace of central bank bond-buying could slow before the end of this year.

The dollar has pulled back from a low of 96.95 yen earlier this week to rise above 98 yen. However, the euro has fallen from this week’s high of $1.3151 to end at $1.3075.

The single currency is likely to remain under pressure following head of the European Central Bank Mario Draghi’s comments that he is not prepared to pull back on the current easy monetary policy.

The greenback is also stronger against commodity currencies including the Australian dollar. The Aussie remains close to a 33-month low at $0.9263. Since May the currency has lost 11 per cent against its US rival.

However, the Aussie is likely to be supported by an announcement from China, Australia’s biggest trading partner, that the government is prepared to stump up the cash for institutions that need it.