The rejuvenated US dollar softened, seemingly trading its running shoes for a pair of flip flops ahead of the unofficial start of summer this weekend. The dollar has been on a ‘run’ this month as the world’s biggest economy has shown renewed signs of vigour and the Federal Reserve has played up the possibility of an imminent interest rate hike. Among the factors that conspired Thursday to pull the dollar back from two-month peaks include: month-end profit-taking, rising oil prices above $50, and caution ahead of a public speaking event Friday by the head of US central bank Yellen. Today, US numbers on weekly jobless claims and durable goods could make a difference for the dollar, with improvement on the cards for both.

Euro

The euro stabilised above 10-week lows against the dollar as profit-taking ahead of America’s long holiday weekend caught up with the US currency. But being a non-fundamental factor, the euro retains a weaker bias with markets paying more attention to the outlook for global interest rates, a negative for the euro and a boon for the buck with risk on the rise for a US rate hike.

Sterling

Sterling is dangerously close to highs for the year against the US dollar as Brexit fears, or worries about Britain exiting the EU, diminish. But just as expectations of an outcome rise so does the risk of disappointment. Despite its rise, GBP-USD levels below $1.50 represent a seldom seen ‘buying zone’ over the better part of the last several decades. If Britain votes to stay in the bloc on June 23, GBP-USD would have a better chance of reclaiming levels above $1.50, and remaining there for a time. US dollar The dollar’s rally to two-month highs encountered speed bumps in mixed news on the world’s biggest economy. Highlighting how the US economy and dollar remain in better though still delicate places, durable goods topped forecasts with a 3.4 per cent rise in April but the accompanying gauge of business spending remained in a funk with an unexpected fall of 0.8 per cent. Jobless claims fell by 10,000 to 268,000 – keeping in a healthy zone below 300,000 for the 64th time in as many weeks, the longest streak in more than 40 years.

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