During the first day of the new trading week, the US dollar showed a planned smooth downward movement against major currencies as a slump in stock markets had a negative impact on the currency. However, expectations for the US Federal Reserve's interest rate hike in the next month are curbing the drop.
Traders still remain cautious because of the signs of slowdown in the Chinese economy. China's GDP keeps on declining. There aren't many reasons for positive prospects of the situation amid the recent turmoil in the Chinese stock market, which followed liquidity inflows implemented under governmental support, and the yuan's sudden devaluation that caused larger capital outflows.
Economists at Goldman Sachs suppose that the investment boom into infrastructure came to an end and financial difficulties make the region authorities spend funds more carefully. Moreover, China's industry senses weakness of the global economy, and credit terms became stricter. Goldman Sachs specialists believe that the forecast for economic rise to 6.7% is too optimistic so they revised the forecast for the Chinese economy downwards to 6.4% in 2016, 6.1% in 2017, and 5.8% in 2018.
As a result, the US dollar index tumbled by 0.17% to 95.98 against the basket of major currencies at the early North American session on Monday. The greenback lost its most gains against the single European currency that rose by 0.27% to the level of 1.1217 yesterday.
The euro was boosted after the release of the consumer price index data in the eurozone. The CPI grew by 0.2% in August beating expectations for a 0.1% rise.