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Forex - Dollar pushes higher despite mixed rate hike outlook

Published 08/19/2016, 09:07 AM
© Reuters.  Dollar index moves higher, but on track for weekly loss
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Investing.com - The dollar pushed higher against the other major currencies on Friday, but was still on track for a weekly loss as investors continued to weigh up prospects for future U.S. interest rate increases.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.45% to 94.53, but was still down 1.2% for the week.

The index fell to lows of 94.05 on Thursday, the weakest level since June 23.

The dollar had weakened after Wednesday’s minutes of the Fed’s July meeting showed that policymakers are split over whether to raise interest rates again soon.

The U.S. central bank left rates unchanged at its meeting last month, but opened the door to rate hikes later this year.

But the minutes said that some officials believe a slowdown in the future pace of hiring would argue against a near-term hike.

The U.S. central bank raised interest rates for the first time in almost a decade in December.

Higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.

The minutes came a day after New York Fed head William Dudley said a rate increase as early as September is “possible.”

The euro was weaker, with EUR/USD down 0.29% at 1.1319.

The dollar gained ground against the yen, with USD/JPY up 0.4% to 100.28.

The pound fell, with GBP/USD down 0.64% to 1.3087.

The Australian dollar was also sharply lower, with AUD/USD falling 0.91% to 0.7616 after a series of rate cuts by Moody’s on Australia’s big four banks.

The Canadian dollar was lower after a series of weak economic reports, with USD/CAD up 0.61% to 1.2860.

Canadian retail sales fell unexpectedly in June official data showed, while another report showed that the annual rate of inflation rate moderated in July, pulled down by cheaper gasoline prices.

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