American focus: the dollar fell

The US dollar fell against the euro and the yen, as investors took profits after recent gains amid fears that China's stock market volatility may deter the Federal Reserve from raising interest rates in the United States in the coming months.

The Chinese stock market on Monday suffered the biggest losses since 2007. Stock indexes have fallen by 8.5% on concerns that the government will postpone the implementation of measures to support the market. Some investors believe that the instability of the stock market in China will make the Fed more cautious when it comes to the matter of tightening monetary policy. This prompted them to sell dollars and buy euros and yen. The prospect of a rate hike in September to support the dollar in recent weeks, as the higher cost of borrowing makes the dollar more attractive to investors seeking to return.

Investors are waiting for the completion of the Fed meeting on Wednesday, as they look for new clues about the timing of rate increases. Fed Chairman Janet Yellen, speaking in Congress earlier this month, stressed that it expects the central bank will raise the fed funds rate at some point before the end of the year.

Little support for the dollar during trading had strong data on orders for durable goods. The volume of orders for durable goods increased significantly in June, offsetting with the fall in the previous two months. This was reported in the statement of the Ministry of Commerce.

According to data seasonally adjusted new orders for durable goods rose in June by 3.4% compared with a decrease of 2.2% in the previous month (revised from -1.8%). Economists had expected orders to increase by 3.0%.

Recall data on orders for durable goods are highly volatile and often revised, making them difficult to analyze. However, other recent reports indicate that the manufacturing sector improves.

The Ministry of Commerce said that the June change partly reflects the increase in demand for airplanes. Orders for non-military aircraft and parts rose 66.1% in June. Separately, Boeing Corporation announced that it has received 161 orders for the aircraft in June to 11 in May.

Excluding the transportation sector, orders rose by 0.8%, recording the largest increase since August 2014. Meanwhile, with the exception of the defense sector, orders rose 3.8%.

A key indicator of business investment also improved in June - orders for non-military capital goods excluding aircraft rose 0.9% after falling 0.4% in May.

Today's report adds to signs that US manufacturers can overcome the difficulties of the strong dollar, harsh winter weather and a drop in oil prices. However, the data also showed that in the first half of 2015, new orders were down 2% compared to the same period in 2014.

Meanwhile, support for the euro has had a report on Germany. The research results presented by the Munich institute IFO, have shown that the index of business sentiment in Germany rose unexpectedly in July, recording the first increase since April. According to the data, the July business climate index rose to 108.0 level against 107.5 in June (revised from 107.4). The latter value was the highest since May this year. Analysts had expected the index to fall to 107.2 points. The current conditions index from the IFO rose in July by 0.8 points, to 113.9 points, while the expectations index jumped to 102.4 points from 102.1 (revised from 102.0). It forecasts a decline of data rate to 113 and 101.8, respectively. "Business expectations were somewhat more optimistic, after declining for three consecutive months. The recent easing concerns about Greece helped to improve sentiment," - said in a press release IFO.

Focus has also proved statistics for the euro area. A report published by the ECB showed that the growth rate of the monetary aggregate M3 remained in June at 5.0%. Experts expect that this figure will increase by 5.2%. In the period from April to June, the average annual growth rate of M3 was 5.1%. Regarding the main components of M3, the growth rate of M1 increased to 11.8% in June from 11.2% in May. The growth rate of short-term deposits other than overnight deposits (M2-M1) amounted to -4.3% in June, against -4.2% in the previous month. We also learned that the annual growth rate of deposits placed by households stood at 3.0% in June compared with 2.9% in the previous month, while the annual growth rate of deposits placed by non-financial corporations slowed to 4.2% from 4.3% in May. Meanwhile, the ECB reported that the growth rate of credit to the government accelerated to 5.3% from 4.1% in May, while the pace of lending to the private sector slowed to 0.1% from 0.2%.