Foreign Exchange: US Dollar Steady after PMI Data
The United States (US) dollar improved Monday following a softer-than-expected ISM manufacturing reading, as the dollar index (DXY) moved to 92.08 from 91.91 at the open.
The greenback had lost marginally against the world major currencies last week over United States economic data miss that sent jittery to the financial market.
There was light trading on Monday, due in part to a holiday in Canada, but should pick up as more vital US data and the Bank of England’s policy meeting approach later in the week.
A summary of Monday’s foreign exchange action shows that EUR-USD hit a high of 1.1897 ahead of the open, later bottoming at 1.1872 before steadying in late morning trade, and then slipping to 1.1865.
Trade was quiet overall, with most major dollar pairings remaining relatively steady. COVID-related growth concerns weighed on Treasury yields and could keep some pressure on the dollar.
GBP-USD retreated from London highs of 1.3933 to 1.3876 into the London close. COVID cases in the UK have dropped back sharply even as restrictions were relaxed and analysts see the pound as undervalued and with room to increase unless risk-taking resumes.
Also, the USD-JPY was down from London highs of 109.75, bottoming at 109.48 in the early US session, but remaining inside of Friday’s range. Softer Treasury yields have kept a cap on the pairing.
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USD-CAD was quiet in morning trade on Monday, hitting 1.2491 highs in Asia, later bottoming at 1.2455 ahead of the open. Later, as oil prices fell, USD-CAD rallied over 1.2510.
Canada was on out Monday for a civic holiday, which kept CAD liquidity at a premium, and trade reined in through the session.
Foreign Exchange: US Dollar Steady after PMI Data
