The U.S. dollar continued to be strong against the other major currencies in the Asian session on Wednesday, in the wake of comments from Atlanta Federal Reserve President Dennis Lockhart that Fed policy makers are prepared to raise the Fed-funds rate in September.
In an interview with The Wall Street Journal, Lockhart told that it would take “a significant deterioration in the economic picture” to persuade the Fed not to raise rates in September. He also said that only a “significant deterioration” in economic momentum could convince him to wait longer.
Lockhart’s words raised strong belief that the Fed is moving closer to raising interest rates at its September meeting.
The U.S. Commerce Department revealed Tuesday that factory orders rose 1.8 percent in June compared to the previous month. Economists were predicting an increase of 1.7 percent. In May, factory orders were lower by 1.1 percent.
Tuesday, the U.S. dollar rose 0.63 percent against the euro, 0.15 percent against the pound, 0.89 percent against the Swiss franc and 0.10 percent against the yen.
In the Asian trading today, the U.S. dollar rose to an 11-year high of 1.3212 against the Canadian dollar and nearly a 4-month high of 0.9789 against the Swiss franc, from yesterday’s closing quotes of 1.3190 and 0.9781, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.34 against the loonie and 0.98 against the franc.
Against the euro and the NZ dollar, the greenback advanced to more than 2-week highs of 1.0847 and 0.6517 from yesterday’s closing quotes of 1.0879 and 0.6536, respectively. The greenback may test resistance near 1.07 against the euro and 0.63 against the kiwi.
The greenback climbed to a 9-day high of 1.5525 against the pound and a 6-day high of 124.47 against the yen, from yesterday’s closing quotes of 1.5558 and 124.37, respectively. On the upside, 1.54 against the pound and 126.00 against the yen are seen as the next resistance levels for the greenback.
Against the Australian dollar, the greenback edged up to 0.7352 from yesterday’s closing value of 0.7377. The greenback is likley to find resistance around the 0.72 area.
Meanwhile, the euro fell to more than a 2-week low of 0.6979 against the pound, from yesterday’s closing quote of 0.6989. The euro may test support near the 0.68 region.
Against the yen and the Australian dollar, the euro dropped to 2-week lows of 135.02 and 1.4735 from yesterday’s closing quotes of 135.32 and 1.4742, respectively. If the euro extends its downtrend, it is likely to find support around 134.00 against the yen and 1.44 against the aussie.
The euro slipped to a 5-day low of 1.4322 against the Canadian dollar, from yesterday’s closing value of 1.4349. On the downside, 1.41 is seen as the next support level for the euro.
Against the Swiss franc and the NZ dollar, the euro edged down to 1.0621 and 1.6611 from yesterday’s closing quotes of 1.0641 and 1.6625, respectively. The euro is likely to find support around 1.04 against the franc and 1.63 against the kiwi.
Looking ahead, service sector PMI reports from major European economies for July and Eurozone retail sales for June are due to be released in the European session.
In the New York session, U.S. private sector jobs data for July, trade balance for June, U.S. services PMI for July and Canada trade data for June are slated for release.