The US dollar opened trading in the new year on a bullish trend yesterday, which was further boosted by the release of positive manufacturing data today. The US ISM Manufacturing Report was released today indicating a positive change in the growth within the manufacturing sector.
The US dollar strengthened against other currencies immediately after the release, but later lost some ground against major currencies such as the British pound.
The US dollar continues with the bullish trend witnessed in the last two months of 2016 in a rally that was triggered by the election of Donald Trump as the US President.
The US construction Spending also rose up to 0.9% beating the predicted figure of 0.5%. New orders were reported at 60.2 and production as reported at 60.3, which is much higher than the break-even level of 50. The US Dollar Index, which tracks the performance of the greenback against other major currencies rose to a 15-year high near the 103.80 level.
Donald Trump is expected to officially assume office as the 45th US President on January 20 and he is expected to keep inflation rates high through policies targeted at reviving the American economy. The higher interest rates are expected to boost the US dollar’s strength against other currencies over the short and medium term.
The USD/JPY pair traded at highs of 118.57 before losing ground and trading at lows of 117.32 as at 18:04 GMT. The EUR/USD currency pair traded at lows of 1.0339 before the US dollar lost ground to trade at 1.0428 at the time of writing.
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