Dollar Steadies Against Major Currencies Ahead of Data Release
The US dollar was steady against its major trading partners early Tuesday, with the clear exception of a surge against the yen, ahead of an expected decline in the ISM manufacturing data for the US in December as global markets reopen and get back to business after the holiday lull.
The United States dollar index (DXY) holds gains with euro (EUR) trading below $1.13 and Yen at the lowest level since 2017
Other releases Tuesday include US job openings and hiring data for November and the weekly Redbook retail sales index for the post-Christmas week ended Jan. 1.
Highlights for the rest of the week include ADP employment and Federal Open Market Committee meeting minutes Wednesday, and the ISM nonmanufacturing reading Thursday, with the December employment report Friday the main event of the week.
Outside of data, the focus remains on rising COVID-19 cases, with the likelihood of a surge over the next few weeks as an after-effect to holiday gatherings.
A quick summary of foreign exchange action heading into Tuesday shows that USD-JPY rose to 116.1393 from 115.3305 at the Monday US close and 115.0595 a day ago, as the interest rate differential between the two countries continues to significantly push down the yen.
The Japan Purchasing Managers’ Index fell to 54.3 in December from 54.5 in November, data released Monday evening showed.
USD-CAD rose slightly to 1.2753 from 1.2747 at the Monday US close and from 1.2685 at the same point a day earlier. Canada reports manufacturing conditions data before the US ISM manufacturing index.
As with the US, the highlight of this week’s Canadian data schedule is the employment report for December due to be released Friday.
EUR-USD fell slightly to 1.1283 from 1.1298 at the Monday US close and from 1.1354 a day ago. Positive data from Germany released earlier Tuesday reduced the downside for the euro. EU inflation data for December, scheduled for release Friday, is the next key metric.
GBP-USD rose modestly to 1.3483 from 1.3478 at the Monday US close but was down from 1.3505 at the same point a day earlier.
The UK manufacturing PMI released earlier Tuesday was revised up from the flash reading for December, though it remained below November’s level. Markets expect a rate increase at the Feb. 3 Bank of England meeting, ahead of a possible Federal Reserve increase mid-year. # Dollar Steadies Against Major Currencies Ahead of Data Release
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