Forex – The euro and the pound declined following statistics


EUR, GBP, USD

Investing.com – The euro and the pound sterling have reached their lowest level in five months Wednesday after disappointing economic statistics, while the u.s. dollar surged as investors anticipate the minutes of the meeting of the Fed later in the day.

The euro was close to a low of five months after the growth of the private sector in the euro-zone has reached its slowest pace in 18 months in may.

The composite index for the euro area, which measures the combined output of manufacturing and services, has recorded a turnover of 54.1 this month, against of 55.0 for the forecast.

The report is likely to push back expectations of an interest rate increase by the european central Bank.

The euro was in decline, the EUR/USD falling 0.48% to 1.1724 to 04h42 (8h42 GMT).

During this time, the pound has fallen to new lows of five months, after data showed that annual inflation slowed in April, which could relieve the pressure on the Bank of England to raise interest rates.

The pair GBP/USD lost 0.53 percent to 1,3362.

Elsewhere, the greenback reached its highest level in five months, as investors turn to the latest report from the federal Reserve that will be released at 14.30 ET (18.30 GMT).
Investors will look closely for any sign of tightening of monetary policy.

A recent rise in bond yields, coupled with the economic data positive and rising inflation, has strengthened forecasts that the federal Reserve will increase interest rates and will tighten the monetary policy.

The Fed has raised its rates in march and is expected to increase its rates two more times, with some investors betting on a third increase.

The dollar index, which measures the greenback’s strength versus a weighted basket based on the trade of six major currencies, rose 0.28% to settle at 93,77. Expectations of rising interest rates tend to boost the dollar, making the currency more attractive for investors in search of yield.

The dollar was down against the yen, the USD / JPY falling by 0.90% to 109,89.

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