The U.S. Dollar strengthened versus its Forex exchange counterparts as lackluster data out of the Euro region and the U.K. raised demand for refuge. However, gains were limited by expectations of more monetary easing by the world’s central banks.
The Euro currency declined following the release of economic data showing that Germany’s Service index slipped below 50, suggesting momentum in the area’s biggest economy is dissipating. This helped fuel further speculation that the European Central Bank may lower the interest rate this week. The 17-nation currency fell versus the majority of its peers after an e economic release revealed that the region’s services and manufacturing output declined for the fifth consecutive month.
The British Pound also weakened against the U.S. Dollar on data indicating that the U.K.’s services sector grew slower than anticipated in the month of June. This also raised the prospect that the Bank of England will increase its bond-purchasing program to 375 billion Pounds.
In other FX trade news, the Australian Dollar traded at a two-month high following a government report confirming that Retail Sales climbed, thereby signaling the country’s economy remains resilient. The Aussie extended gains after a previous announcement showed that Home Building approvals rose by a record amount in May.
The Canadian Dollar touched a six-week high versus its American counterpart after oil, its biggest export, gained on the probability the ECB along with China’s central bank will implement further stimulus to bolster economic growth.
Trading was light as U.S. markets were closed for Independence Day.