U.S Dollar Rises Ahead of Sales, Inflation Data
The US dollar rose against its major trading partners early Tuesday ahead of the release of sales and consumer inflation data. The dollar was a little softer against most currencies on Monday after Chinese policymakers said they would boost consumption ‘forcefully’.
This will be music to the ears of President-elect Donald Trump who is seeking to reverse China’s $300 billion trade surplus with the US, ING analyst Chris Turner said in a note.
The news particularly helped China-centric currency pairs such as the Australian dollar and the South African rand, Tuner added. The US data calendar is light and the focus should be on some slightly better small business optimism embodied in the NFIB index.
“We doubt investors will want to chase the DXY too much lower ahead of tomorrow’s US CPI number and would expect support at 105.40/60 to hold on a closing basis.”.
The National Federation of Independent Business reported that small business confidence surged to a 3-1/2 year high in November and business uncertainty declined, which NFIB attributed to the election results.
Expectations for future economic conditions were positive for the first time since November 2020, according to analyst note. A quick summary of foreign exchange activity heading into Tuesday USDEUR fell to 1.0525 from 1.0551 at the Monday US close and 1.0567 at the same time Monday morning.
There are no Eurozone data on Tuesday’s schedule. The next European Central Bank meeting is scheduled for Thursday, when a 25 basis point rate reduction is expected.
GBPUSD fell to 1.2746 from 1.2748 at the Monday US close and 1.2767 at the same time Monday morning. There are no UK data on Tuesday’s schedule. The next Bank of England meeting is scheduled for Dec. 19.
USDJPY rose to 151.6335 from 151.1887 at the Monday US close and 150.6306 at the same time Monday morning. Japanese machine tool orders year-over-year growth slowed in November, according to data released overnight. The next Bank of Japan meeting is scheduled for Dec. 18-19.
USDCAD rose to 1.4172 from 1.4168 at the Monday US close and 1.4130 at the same time Monday morning. There are no Canadian data on Tuesday’s schedule. The next Bank of Canada meeting is scheduled for Wednesday, when a 50 basis point rate reduction is expected. French Embassy to Empower 1,500 Youths on Agric. Dev’t in Kano
