FOREX: US Dollar in a Tight Range as Pairs Consolidate Gains
The United States dollar remained in a tight range into Thursday, slightly ahead of recent lows, as traders prepare for Friday’s May employment report in the United States. Meanwhile, Euro was seen at strong support, consolidating its previous gaining momentum amidst improvements in Covid-19 caseloads records in the space.
Currencies traders spotted that the US dollar index (DXY) lifted back above 90.10, between Wednesday’s low of 89.88 and its high of 90.25, with the dollar marginally improved against its major trading partners.
The calendar on Thursday includes the United States based online payroll processing firm ADP employment data and weekly jobless claims, as well as more Fed speakers that could offer up taper-talk, though it’s unlikely that markets will be buffeted by any of it ahead of Friday’s report.
Currencies traders’ quick summary of foreign exchange action heading into Thursday showed that EUR-USD has settled to an orbit of the 1.2200 level, consolidating recent gains.
As noted, the five-month high that was seen last week at 1.2267 has for now slipped back out of focus. The euro has seen a boost from an improving Eurozone economic outlook and a contained COVID wave.
The situation in the US remains the same, with Fed watchers looking for any sign that the central bank will react to inflationary pressures. The US economy is advancing faster than the EU’s, but so is inflation.
USD-JPY has recouped back above 109.50 into Thursday as risk-taking has shifted focus to faster growing economies. Further issues with the Tokyo Olympics due to COVID concerns are also weighing on the yen.
GBP-USD has rebounded after dipping Wednesday, settling between 1.41 and 1.42, down from a week ago when hawkish talk from a Bank of England member spurred thoughts of an early rate hike. COVID concerns and a possible delay in the final stage of reopening, scheduled for June 21, is putting downward pressure on the pound.
USD-CAD has lost downside momentum, at least for now, despite oil prices scaling to new trend highs into Thursday. WTI futures have posted a new 32-month high at $69.40, which marked a near 5% gain on the week thus far.
Oil prices have been supported by OPEC’s decision to maintain production below capacity despite rising global demand. As a result of expected higher oil prices and falling COVID cases, the outlook for the Canadian dollar remains to the upside.
FOREX: US Dollar in a Tight Range as Pairs Consolidate Gains
