The US dollar backed off today against its major peers, but the losses for the most part were not as big as yesterday’s gains. As an exception, the greenback closed flat versus the Japanese yen on Monday and sank today.
Monday’s data from the United States was mixed, and it perhaps played a role in the halt of the dollar’s rally. While the Empire State Manufacturing Survey was very good, saying that “business activity expanded at a robust pace for New York manufacturers”, data about industrial production and the capacity utilization rate was worse than expected.
The Forex market is often sentiment-driven, and it becomes especially apparent ahead of some important event like this week’s monetary policy announcement from the Federal Reserve. Traders react to any piece of news they get, sometimes resulting in unexpected and volatile moves on the market.
In case of the dollar, the negative part of yesterday’s data damaged bulls’ confidence a bit but did not erase it completely. The greenback is currently actually attempting to reverse its losses, and there is a possibility that the currency will resume its rally.
EUR/USD ticked up from 1.2940 to 1.2948 as of 2:45 GMT today. GBP/USD rose from 1.6232 to 1.6240. USD/JPY slid from 107.18 to 107.02, touching the daily low of 106.93.
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