020 7898 0500The US dollar edged higher yesterday as investors consolidated positions, one day after fresh political turmoil in Washington caused the dollar to post its biggest monthly drop in 16 months. Uncertainty was expected to continue weighing on the dollar, given Donald Trump’s sacking of communications chief Anthony Scaramucci on Monday, only ten days after he was hired.
The euro has gained over 12% this year against the dollar, and Sterling hit US$1.32, an 11-month high. Expectations that the US Central Bank will increase interest rates have dropped again, which is also weighing on the greenback. Recent data has shown that the US economy might be doing better than expected, and a purchasing managers’ index survey showed manufacturing in the US remains buoyant.
The market appears to be consolidating ahead of the all-important US non-farm payrolls data on Friday, and today’s precursor, the ADP employment figure, will be watched closely for signs of growth in the US. Expectations are 187,000, up from 158,000 last month.
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