Dollar Trades Mixed Ahead of Fed Minutes Release
The United States (U.S) dollar was mixed against its major trading partners early Tuesday ahead of a full data schedule following a quiet Monday, according to global market data tracked today.
The highlight of the day is ISM’s monthly services reading for March, preceded by the trade deficit for February, weekly Redbook retail sales and the S&P Global services PMI.
The minutes of the most recent Federal Reserve meeting will be released Wednesday and are expected to provide details on the Fed’s plans to draw down its securities holdings.
A quick summary of foreign exchange activity heading into Tuesday shows USD-CAD fell to 1.2459 from 1.2487 at the Monday US close and 1.2501 a day earlier. The Canadian trade balance will be released today.
The data highlight of the week will be the Canadian employment report on Friday. The Bank of Canada meets on April 13 and markets are split on whether policymakers will raise rates by 25 basis points or decide to accelerate its tightening path with a 50-bp increase.
USD-JPY rose to 122.9506 from 122.7724 at the Monday US close and 122.7972 at the same point a day earlier. Japanese services purchasing manager index (PMI) jumped in March but remained below the breakeven point as a high level of COVID-19 cases remained data released overnight showed.
Other data showed a decrease in Japanese household spending in February. The Bank of Japan’s ultra-low interest rate regime is expected to remain for some time, with the central bank actively defending its rate cap with bond-buying last week.
EUR-USD was little changed at 1.0972 from 1.0971 at the Monday US close but was down from 1.1005 at the same point Monday morning. READ: Dollar Trades Mixed Ahead of FOMC Meeting
The European Union, EU, services purchasing manager index (PMI) was revised higher in March earlier Tuesday, putting it just above the February reading and at the highest level in four months. Country-specific readings were mixed, with gains in Germany and France but declines in Italy and Spain.
The European Central Bank will need to balance the impact of rising inflation with the situation in Ukraine when it meets next on April 14. GBP-USD was up slightly to 1.3131 from 1.3115 at the Monday US close and 1.3104 a day earlier.
The UK services PMI rose sharply in March, data released earlier Tuesday showed, continuing the recovery from the latest wave of COVID-19. The Bank of England is expected to raise interest rates further at its May meeting. #Dollar Trades Mixed Ahead of Fed Minutes Release
