U.S. Dollar Extends Fall On Fed Bets

(RTTNews) - The U.S. dollar extended its early weakness against other major currencies in the Asian session on Friday following the release of the U.S. producer inflation data showing the smallest annual increase in prices in nearly three years, adding to bets that the Fed could soon end its monetary tightening campaign.

Data from the labor Department showed on Thursday that the producer price index edged up by 0.1 percent in June after falling by a revised 0.4 percent in May.

Economists had expected producer prices to rise 0.2 percent compared to the 0.3 percent dip originally reported for the previous month.

The report also said the annual rate of producer price growth slowed to just 0.1 percent in June from a revised 0.9 percent in May.

The pace of growth was expected to slow to 0.4 percent from the 1.1 percent originally reported for the previous month.

The data suggested that Fed rate hikes could stop after the 25-basis point increase at the July 25-26 meeting.

The U.S. dollar started falling against its major rivals from 6th July.

In the Asian trading today, the U.S. dollar fell to near 1-1/2-year lows of 1.1243 against the euro and 1.3142 against the pound from yesterday's closing quotes of 1.1226 and 1.3135, respectively. If the greenback extends its downtrend, it may find support around 1.15 against the euro and 1.35 against the pound.

Against the Swiss franc and the yen, the greenback dropped to an 8-1/2 year low Of 0.8569 and nearly a 2-month low of 137.23 from yesterday's closing quotes of 0.8587 and 138.04, respectively. The greenback may test resistance near 0.83 against the franc and 130.00 against the yen.

Against the Australia, the New Zealand and the Canadian dollars, the greenback slipped to near a 1-month low of 0.6895, near a 6-month low of 0.6412 and a 10-month low of 1.3092 from Thursday's closing quotes of 0.6888, 0.6392 and 1.3109 respectively. On the downside, 0.72 against the aussie, 0.65 against the kiwi and 1.29 against the loonie are seen as the next support levels for the greenback.

Looking ahead, Eurozone trade balance for May is due to be released at 5:00 am ET.

In the New York session, Canada manufacturing sales data for May, U.S. export and import prices data for June, U.S. University of Michigan's preliminary consumer sentiment for July and U.S. Baker Hughes oil rig count data are slated for release.