The greenback extended its loss across the board on Monday as concerns over subprime mortgage meltdown and the Fed future policy move continue to weigh on investors sentiment. The dollar hit a 26-year low versus the British pound at 2.0172, while dropped to a 7-week low against the euro and the pair is on the way to attempt a multi-year high at 1.3680 set in late April.
The European Central Bank and the Bank of England will hold monetary policy meeting this Wednesday and are widely expected to hold interest rates at 4.00% and 5.50% respectively. There is still some speculation that the BOE may lift rates and surprise the market again. Both of the banks are likely to issue a pretty hawkish statement on the economy and inflation to set stage for at least one more rate hike in the second half of the year.
Earlier in the session, the dollar was little changed after a report showed US manufacturing ISM index for June came in at 56 as expected, slightly above the previous reading of 55. The market tomorrow will look to Swiss CPI, US durable goods orders, US pending home sales, and US factory orders.
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