The US dollar opened at Friday’s elevated levels but has declined versus most of its major rivals by now. It looks like uncertainty associated with this week’s policy announcement from the Federal Reserve hit the currency after all. Domestic macroeconomic data, being poor, was not helping the greenback.
The New York Empire State Manufacturing Index dropped to 10.9 in December from 23.3 in November. Experts had predicted a much better figure of 20.1. The data was not totally bad as it suggested that business activity continued to grow in New York, just with slower pace. The report said:
Looking ahead, firms remained fairly optimistic about the six month outlook, though optimism was slightly more tempered than in November.
The builder confidence index reported by the National Association of Home Builders disappointed as well, falling to 56 in December from 60 in November. Analysts had expected it to stay basically unchanged.
The US Dollar Index opened at 97.44, near the Friday’s 19-month high of 97.71, but has retreated by 0.31% to 97.14 by now. Nevertheless, the bullish outlook for the dollar remains in place, at least until the Fed announces its policy on Wednesday. Afterwards, it all depends on what the Fed has to say.
EUR/USD rose from 1.1302 to 1.1333 as of 15:09 GMT today, touching the high of 1.1353 intraday. GBP/USD traded at 1.2606, near the opening level of 1.2600. USD/JPY dropped from 113.35 to 112.95.
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