CFD/FX Trading Involves Risk. Losses May Exceed Deposits.

U.S. Dollar Pulls Back From 18-Month High

2018-12-18 11:07:57Trading Strategies
U.S. Dollar Pulls Back From 18-Month High

The U.S. dollar pulled back from an 18-month high on Monday after disappointing economic data.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.2% to 96.69 as of 10:10 AM ET (15:10 GMT), after an overnight high of 97.69.

The Empire State manufacturing index was lower in December, adding to concerns over the health of the U.S. economy. The reading was at 10.90 from 23.30 in November, the New York Fed reported on Monday.

Meanwhile, investors are looking ahead to Wednesday when the Federal Reserve is expected to increase rates by 25 basis points for the fourth time this year. Chances of a hike were priced in at 77.5%, according to Investing.com's Fed Rate Monitor Tool.

Still, investors remain uncertain of the number of rate hikes in 2019 after dovish comments from Fed officials, who hint that interest rates are nearing neutral.

Comments on Monday from U.S. President Donald Trump added to the uncertainty, as he continued to criticize the pace of Fed hikes.

The dollar was down against the safe-heaven Japanese yen, with USD/JPY slumping 0.4% to 112.95.

Meanwhile, the pound was higher despite Brexit woes, with GBP/USD up 0.2% to 1.2607.

The euro was pushed up by the lower dollar, with EUR/USD rising 0.2% to 1.1332.

Elsewhere, NZD/USD increased 0.1% to 0.6806 while AUD/USD inched up 0.03% to 0.7179. The Canadian dollar decreased with USD/CAD up 0.1% to 1.3405.