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Dollar loiters near three-week low as rate hike expectations diminish

News Date: 1/8/2016 03:40:46
Dollar failed to recover the heavy losses made last Friday after data showed the U.S. GDP grew by just 1.2% in the second quarter, much less than the 2.6% growth expected, which slashed the chances of any rate hike this year from the Federal Reserve.
The dollar index, which measures the greenback's performance against a bunch of six main rivals, last traded at 95.61, not far from a three-week trough hit last Friday at 95.33, while trading flat against the euro at 1.1168.

The yen on the other hand suffered losses on profit-taking after spiking three percent on Friday following the less-than-expected stimulus measures from the Bank of Japan, with the yen last trading at 102.45 against the dollar, down 0.40% on the day.

Silver prices surged as the sentiment sours in the markets, with the futures gaining 24 cents, or 1.18% to trade at $20.58 an ounce, while gold prices failed to keep up, shedding 0.16% to $1,355 an ounce.

Investors await a basket of data later today, with Britain's manufacturing PMI expected to stay the same at 49.1 in July, indicating another contraction in the sector, which is negative for the pound.

From the U.S., ISM manufacturing PMI is forecast to inch down to 53.1 in July from June's 53.2, but it remains far above 50, the line separating growth from contraction, a positive sign for the dollar.

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