Dollar Consolidates as Focus Returns to US Data
A gauge of the dollar stabilized following the sharpest decline in a month on Monday, with traders now pivoting to upcoming US economic data before next week’s Federal Reserve meeting.
The Bloomberg Dollar Spot Index was little changed. That’s after falling 0.3% in in the last session in response to President Donald Trump’s fresh tariff threats to select European nations.
Traders are now waiting for US ADP weekly employment change and Philadelphia Fed non-manufacturing activity data later in the day for clues on Fed policy.
The Supreme Court hearing over President Donald Trump’s attempted dismissal of Fed Governor Lisa Cook is also on investors’ radar, especially with Chair Jerome Powell expected to attend.
“The structural pressures of fresh concerns about the US’ already fragile economic outlook, faith in US institutions, and/or its respect for national sovereignty could shake investor confidence, and thus weigh on the USD over the medium-term,” Peter Dragicevich, currency strategist at Corpay Inc., wrote in a note.
Treasury 10-year yields rose three basis points to 4.25% as trading in the cash market resumed after a holiday on Monday.
Bonds also fell in Japan, with the 40-year yield rising to 4% for the first time since the securities were introduced in 2007.
USD/JPY edged down 0.1% to 158.02 ahead of a 20-year JGB auction and as losses in US stock futures deepened.
EUR/USD little changed at 1.1645 with traders keeping a close watch on Trump’s comments at he World Economic Forum in Davos on Wednesday.
GBP/USD held near 1.3420 option strikes into UK jobs data.
NZD/USD gained 0.3% to 0.5816, rising for a third straight session.
AUD/USD up 0.1% to 0.6719.
Source : Bloomberg.com
