U.S. Dollar Drops as Investors Revise Expectations of U.S. Economic Growth

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U.S. Dollar Drops as Investors Revise Expectations of U.S. Economic GrowthThe U.S. dollar declined versus many of its 16 major counterparts on bets that the U.S. economy grew much slower than expected in the second quarter.

The greenback declined less than 0.1 percent to trade at $1.3433 per euro by 3:32 p.m. in New York. The currency hit $1.3422 on July 25, its highest level since November 21. The dollar steadied at 101.87 yen as the euro appreciated 0.1 percent to 136.85 yen.

“We should expect a rebound in the second quarter, but we don’t think the rebound is going to be as strong as the market expects,” Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York, told Bloomberg. “It’s probably going to weigh on the dollar if it disappoints.”

The dollar lost its ground against the euro after days as the market awaited the Federal Reserve to hold its meeting on Wednesday to discuss the rate of interest rate hikes and whether to cut down further bond purchases.

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Meanwhile, the Russian ruble fell for the third straight day as investors expressed worries on the possible effect f the additional sanctions. The ruble declined by up to 1.2 percent to trade at 35.5701 per dollar, its weakest level since May 6. The Russian currency lost its value as European Union and the U.S. moved in to roll out sanctions against Moscow over its perceived backing for Ukrainian rebels.

The New Zealand dollar retreated 0.1 percent to 85.47 U.S. cents after earlier declining to 85.30 cents, its lowest level since June 12. The kiwi touched 88.36 cents on July 10, its highest level since the high of 88.43 that was attained on August 2011. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com