The U.S. dollar edged up against its major rivals on Monday, trimming its early losses, as traders sought safe-have currencies amid global growth concerns, as Japan’s economy unexpectedly fell into recession in the third quarter.
Official data showed Japan’s gross domestic product unexpectedly contracted 1.6 percent year-over-year in the third quarter of 2014, tipping the country back into recession. The headline figure was well shy of forecasts for an increase of 2.2 percent after a 7.3 percent contraction in the April-to-June quarter.
Profit taking and data showing a decline in U.S. inflation expectations for coming year weighed on the greenback in Asian morning trading.
Although the U.S. consumer sentiment index rose to a new 5-year high of 89.4 in November, one-year inflation expectations fell to 2.6 percent in November from 2.9 percent in October, report from Thomson Reuters and the University of Michigan showed on Friday.
The Federal Reserve views inflation as well as labor market data as key gauge to assess the overall health of the U.S. economy.
The greenback that fell to near a 3-week low of 0.9552 against the franc at 9:55 pm ET reversed direction and held steady, trading at 0.9610. The next possible upside target for the greenback lies around the 0.975 zone.
After falling to near a 3-week low of 1.2577 against the euro in early deals, the greenback rose and traded steadily in European deals. The pair was trading at 1.2495, compared to Friday’s closing value of 1.2521. If the greenback continues its uptrend, it may challenge resistance around the 1.24 mark.
The greenback rose to 1.5619 against the pound, and held steady thereafter, from an early 4-day low of 1.5735. Further uptrend may see the greenback finding resistance surrounding the 1.55 level.
The greenback reversed from an early 4-day low of 115.44 against the yen and rose back to 116.24. The greenback is thus heading to pierce its early 7-year high of 117.04.
The greenback bounced off from its prior multi-week lows of 0.8795 against the aussie and 0.7974 against the kiwi, and was trading at 0.8729 and 0.7922, respectively. Next key upside target levels for the greenback may be located around 0.86 against the aussie and 0.78 against the kiwi.
Having fallen to 1.1267 against the loonie at 10:00 pm ET, the greenback changed path and rose to 1.1320. The greenback may possibly challenge resistance around the 1.14 level.
Looking ahead, U.S. industrial production for October is due shortly.
The material has been provided by InstaForex Company – www.instaforex.com