RTTNews - The dollar firmed up versus other major currencies Monday morning in New York as stocks appeared set to pull back, fueling risk aversion and renewed interest in the safe haven buck.
Before the markets open, the New York Federal Reserve is likely to release the results of its manufacturing survey for June. The survey gives an early indication of how conditions in the sector is panning out in a particular month.
After the solid 10-point improvement in May, which wasn't still good enough to suggest expansion, the general business conditions index is expected to show a modest deterioration from May levels.
Later in the day, traders will get an inkling on the housing sector is faring from the National Homebuilders' Association's housing market survey, which is due out at 1 PM ET. The index has been showing an improvement for the past five months.
The dollar hit a weekly high versus the euro Monday morning, rising a penny to 1.3850. With the advance, the dollar moved further away from a 5-month low of 1.4338, set earlier in June.
The buck managed to hold its ground versus the sterling, staying near 1.6350. Earlier in the month, the culminated a dismal stretch with a 6-month low of 1.6662, but has since fallen no further despite testing that mark last week.
The British economy is showing stabilization, but it will not be until the beginning of 2010 that there will be a return to growth, the Confederation of British Industry or CBI said Monday.
The business lobby said the GDP would flatten out in the second half of this year, underpinned by low interest rates and quantitative easing. It expects modest growth to resume during the first three months of 2010, with the growth rate gradually picking up next year.
The dollar consolidated its recent gains versus the yen, holding above 98 yen for a third day. Earlier in June, the dollar hit a monthly high of 98.87, and has since barely budged.
Bank of Japan monetary policy committee began two-day meeting in Tokyo. Economists expect the BoJ to maintain its key interest rate near zero, but lift the assessment of the current economic conditions in Japan.
The price of oil dropped $1 to below $72 a barrel Monday morning, helping the dollar extend its rebound versus the petro-linked loonie. The dollar rose to a nearly three-week high of C$1.1331, up more than 5 cents from a recently-seen 7-month low near C$1.08.
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