Dollar Extends Monday’s Gains into Tuesday

The US dollar rallied on Monday and extended its gain against the most-traded rivals on Tuesday as relatively positive macroeconomic data released from the United States increased chances for an interest rate hike from the Federal Reserve and boosted the appeal of the currency.
Institute for Supply Management released its manufacturing Purchasing Managers’ Index on Monday, showing an increase above the neutral 50.0 level. That suggests the US manufacturing sector turned from contraction back to expansion. The news was welcomed by dollar bulls. Adding to their delight, the CME FedWatch page now shows that chances for a rate hike in December increased from about 55% to more than 60%.
Yet it is unlikely for manufacturing data alone to spur the Fed into action. A very important piece of data, non-farm payrolls, will be released on Friday. Experts predict the report to show a moderate gain of US employment by 171,000 jobs.
EUR/USD slid from 1.1210 to 1.1200 as of 2:29 GMT today. GBP/USD went down from 1.2838 to 1.2823. USD/JPY edged up from 101.64 to 102.32, trading near the highest level since September 21.

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