The dollar is trading mixed versus its major rivals on Tuesday. The European Central Bank and the Bank of England are both expected to announce their decisions regarding interest rates following their respective meetings on Thursday. Speculation is running high that we will see a reduction in rates.
Trading volumes have been down on Tuesday, due to the holiday shortened trading session. Wednesday's Fourth of July holiday will likely further reduce trading volume, with a full close of the American markets.
U.S factory orders posted a stronger than expected rebound in May, buoyed by orders for ships, boats and aircraft, according to figures released Tuesday by the Commerce Department. New orders for manufactured goods at came in at $469.0 billion, a 0.7 percent increase that partially reverses two consecutive months of declines.
Although the April level of factory orders was revised down to show a 0.7 percent decline compared to the 0.6 percent decrease initially reported, the May increase comes in significantly strong than the 0.1 percent growth predicted by most economists.
The dollar had been holding steady in comparison to the Euro, around the $1.2575 level, but has since fallen to around $1.2625.
Eurozone producer price inflation eased to the lowest level in more than two years in May, as inflationary pressures continue to recede amid sluggish economic performance, the latest data from the Eurostat showed Tuesday.
The producer price inflation in the domestic market eased to 2.3 percent in May from 2.6 percent in April. This is the weakest rate since March 2010. Economists had forecast inflation to fall to 2.5 percent. The Eurozone producer price index fell 0.5 percent, following a 0.1 percent gain in the preceding month.
The greenback has been holding steady compared to the pound sterling since Friday, hovering around $1.5680.
British construction output declined at the sharpest pace in two-an-a-half years in June, a survey by Markit Economics found Tuesday. The Markit/CIPS Construction Purchasing Managers' Index fell to 48.2 in June from 54.4 in May.
Confidence among British business firms remained still lower than levels seen before the recession in 2007 constrained by weak domestic demand, the British Chambers of Commerce (BCC) said Tuesday in its latest Quarterly Economic Survey.
"While domestic growth continues to bump along the bottom, the silver lining is an increase in firms looking for export opportunities, and in many cases, with countries outside Europe," BCC Director-General John Longworth said. "Growth cannot wait. The government must take an imaginative and brave approach to stimulating the economy and helping businesses thrive," he added.
The buck has rebounded from Monday's low of Y79.301 versus the Japanese Yen, back to around Y79.850 on Tuesday.
Japan's average monthly wage earnings in May logged it first decline in four months, data from the Ministry of Health, Labour and Welfare showed Tuesday. Cash earnings were down 0.8 percent annually, following a 0.2 percent rise in April. The decline was largely driven by a 39.9 percent fall in special payments, predominantly summer bonuses.
by RTT Staff Writer
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