Dollar soars ahead of Fed minutes, jobs data

Dollar soars ahead of Fed minutes, jobs data
Dollar soars ahead of Fed minutes, jobs data
© Reuters

By Peter Nurse – The U.S. dollar climbed strongly Tuesday ahead of the week’s key economic data.

At 03:55 ET (08:55 GMT), the , which tracks the greenback against a basket of six other currencies, rose 1% to 104.345.

Tuesday’s main economic release is the U.S. for December, which is expected to show the sector still in contraction territory.

However, most eyes will be on the Federal Reserve on Wednesday and U.S. data later in the week to set the early thinking on interest rates in the new year.

The raised interest rates by 50 basis points last month, a reduction in size after delivering four consecutive 75 basis point hikes, but has said it may need to keep interest rates higher for longer to tame inflation.

fell 0.1% to 130.69, with the yen handing back gains after climbing to a seven-month high against the dollar following the Bank of Japan’s decision last month to raise its bond-yield cap.

Adding to the expectations that the Japanese central bank was reconsidering its current monetary stance was a report, released over the weekend, that said the was considering raising its inflation forecasts in January.

Governor Haruhiko Kuroda has dismissed the chance of a near-term exit from the ultra-loose monetary policy, but the central bank was forced to support the yen late last year as it weakened to a 32-year low against the dollar as the aggressively tightened to combat .

Elsewhere, fell 0.9% to 1.0566, ahead of the release of key German inflation data, which is expected to show a reduction in to 9.1% in December, from 10.0% the prior month.

The state of North Rhine-Westphalia – Germany’s largest by population and economic output – said annual inflation slowed to 8.7% in December from 10.4% in November and a peak of 11% in October.

However, food prices – the largest part of many families’ monthly outgoings – rose another 0.5%, leaving them up 13.8% on the year. More worryingly, the overall CPI without volatile food and energy prices rose 1.0%, pushing the annual ‘core’ measure of inflation up to 4.9% from 4.6%.

fell 0.8% to 1.1951, ahead of the release of the release for December, which is expected to show this important sector remains in contraction territory.

The risk-sensitive fell 1.2% to 0.6723, while edged 0.1% higher to 6.9045 after data from a private survey, released earlier Tuesday, confirmed Chinese manufacturing activity shrank for a fifth straight month in December, with the coming in at 49.0.

This represents a drop from last month’s reading of 49.4, and the fifth straight month that the manufacturing PMI has spent in contraction territory.

Leave a Reply

Your email address will not be published. Required fields are marked *

New Brokers
2.8 rating
Buy & sell Crypto in minutes
3.0 rating
Note: Investing involves risks. You can lose your deposit. We advise you to only invest in financial products which match your knowledge and experience.
2.0 rating
Interactive Brokers attracts active traders with low per-share pricing, an advanced trading platform.
4.3 rating
eToro is the world’s leading social trading platform, with thousands of options for traders and investors.
Risk Warning: The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory or other services by AdonFinance. In addition, the content of the website offers no opinion with respect to the suitability of any security or any specific investment. Trading foreign exchange, stocks, cryptocurrencies and commodities is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against traders. Before any investment with any broker you need to carefully consider your targets, previous experience, and risk level. Forex trading can result in the loss of your money, as a result, you are expressly cautioned that you should never invest or trade with money that you cannot afford to lose. For the avoidance of doubt, AdonFinance's service provides Brokers reviews in the Financial market. AdonFinance, its subsidiaries, agents or affiliates will assume no responsibility whatsoever for your trading activity. © Copyright 2021 AdonFinance