U.S. Dollar Advances Amid Strong ISM Services PMI; Fed Minutes Due
RTTNews · 07 Jul 2022 132 Views

The U.S. dollar was higher against its major counterparts in the European session on Wednesday, as the nation's service sector activity improved in June and investors awaited the release of the minutes of the Federal Reserve's June policy meeting for clues about the future path of monetary tightening.

The Institute for Supply Management's non-manufacturing PMI rose to 55.3 in June, beating forecasts for a rise of 54.3.

The minutes, which will be published at 2 pm ET, could shed light on policy makers' views about the near-term path for interest rates amid high inflation and cooling economic growth.

Traders also focus on June nonfarm payrolls report due on Friday for more signals on the potential pace of rate hikes.

Markets expect another rate hike of 75 basis points by the end of this month after a similar move at the June meeting.

The greenback touched 1.0166 against the euro, its highest level since December 2002. On the upside, 0.97 is seen as its next resistance level.

The greenback firmed to more than a 2-year high of 1.1876 against the pound and near a 3-week high of 0.9726 against the franc, following its early lows of 1.1989 and 0.9671, respectively. The next possible upside target for the currency is seen around 1.16 against the pound and 1.01 against the franc.

The greenback rebounded to 136.00 against the yen, from a 2-day low of 134.95 seen at 8:30 am ET. If the greenback strengthens further, it is likely to test resistance around the 139.00 level.

The greenback recovered to 0.6134 against the kiwi, 1.3064 against the loonie and 0.6771 against the aussie, off its prior lows of 0.6192, 1.3012 and 0.6826, respectively. The greenback is seen finding resistance around 0.60 against the kiwi, 1.32 against the loonie and 0.66 against the aussie.

The Fed minutes from the June 14-15 meeting are due at 2:00 pm ET.

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