U.S. Dollar Trades Mixed Ahead of Data Schedule
The United States (U.S.) dollar was mixed against its major trading partners early Thursday ahead of the final busy day before the holidays.
Thursday’s packed data schedule is highlighted by the release of personal income and spending, initial jobless claims, and new home sales before Friday’s market holiday and the usual lull between Christmas and New Year’s Day next week.
A quick summary of foreign exchange action heading into Thursday shows that GBP-USD rose to 1.3429 from 1.3355 at the Wednesday US close and 1.3317 at some point a day ago.
Daily new COVID cases continue to remain near record highs in the UK, especially in the more populated areas near London.
The impact of any preventative measures will weigh in Q4 growth and could slow the Bank of England’s pace of monetary policy tightening. There are no UK data scheduled for release on Thursday.
EUR-USD fell to 1.1313 from 1.1327 at the Wednesday US close but was up from 1.1301 a day earlier. As with the UK, the omicron variant is boosting the caseload in Europe and threatening to slow the pace of the recovery.
Data released earlier Thursday from Germany, Spain and Italy showed some improvement, except for a dip in Italian business confidence.
The European Central Bank said last week that it expects to hold interest rates steady until 2023 due to the spread of COVID, particularly the omicron variant.
USD-JPY rose to 114.3822 from 114.1152 at the Wednesday US close and from 114.2356 a day ago. After dipping below the 114 mark last week, the pair has recovered this week.
The yield differential between the US and Japan will continue to support the dollar, particularly after the FOMC moves through its accelerated tightening and begins to consider interest rate increases. There are no Japanese economic data scheduled for Thursday.
USD-CAD fell slightly to 1.2825 from 1.284 at the Thursday US close and from 1.2903 a day ago. With the Fed and the Bank of Canada both on track for rate increases in 2022, the movement of USD-CAD is contingent on data releases and oil prices.
Canadian GDP will be released at 8:30 am ET Thursday at the same time as the U.S claims, personal income and durable goods orders. # U.S. Dollar Trades Mixed Ahead of Data Schedule
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