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Dollar Fails to Rally due to Poor Economic Data from USA

February 24, 2016 at 23:36 by Vladimir Vyun

The US dollar was rising against other currencies during the Wednesday’s trading session but was hurt by weak macroeconomic data released from the United States. As a result, the greenback traded flat against some most-traded currencies and fell versus others. The US currency still outperformed the Great Britain pound due to the Brexit fears.

Unlike the previous trading session, when US economic reports were mixed, Wednesday’s data was bad all around. The unexpected contraction of the services sector and the bigger-than-expected drop of new home sales did not paint a pretty picture of the US economy.

The poor indicators reduced chances for an interest rate hike from the Federal Reserve soon. It looks like Fed members are also unsure if they will be able to hike rates. Such uncertainty was highlighted in the speech of Vice Chairman Stanley Fischer who said:

Now, with our next FOMC meeting just three weeks away, I expect most of you are less interested in what we did at our previous meetings, and more interested in what we are going to do at the next one. I can’t answer that question because, as I have emphasized in the past, we simply do not know.

EUR/USD traded at 1.1016 as of 23:34 GMT after opening at 1.1018 and falling to 1.0957 intraday. GBP/USD was down from 1.4019 to 1.3921. USD/CHF declined from 0.9911 to 0.9888.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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