USD extends gains across the board after the data and amid the Fed fallout

The US dollar continues gaining ground as US traders provide another reaction to the hawkish Fed hike[1]. The trigger is the release of US data, which came out somewhat better than expected.

Here are the movers and shakers in currency markets. As always, USD/JPY makes a bigger splash than other currency pairs, at least when it comes to a reaction to US events.

Here is the dollar/yen chart. Note that it finally completed the U-turn. EUR/USD did that already last night.

Why is the dollar rising?

US jobless claims are down to 237K, slightly better than 241K predicted. The New York Manufacturing Index for June jumped to 19.8 against 5.2 expected. The Philly Fed Index dropped from the highs but beat expectations with 27.6. Only import prices missed with a slip of 0.3%. Inflation remains low.

The real trigger is the Fed decision. Not only did they raise interest rates despite falling inflation, they also sounded optimistic. Yellen dismissed the fall in inflation and blamed several “one-off” factors. In addition, she expressed confidence about growth and announced some details of the plan to reduce the Fed’s balance sheet.

The dollar seems to be ignoring the political risk. Trump is under investigation[5] for allegedly obstructing justice. Mueller, the special counsel, is checking out whether he tried to intervene in the Russia investigation.

We still have industrial output and other figures later on.

More:

Get the 5 most predictable currency pairs[6]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/3a8VwnFV1wY/

from Online Forex Trading Resource
View thesource article here

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