Yesterday was a very slow day for the US dollar, with minimal data out and little significant news surrounding the safe-haven currency. We did see the release of factory orders data for December, which was lower than expected, dropping to lows not seen since October 2014. However the data flow starts to build up in the second half of the week so we can expect greater market reaction as the impact of these data releases take effect.
Talk on Tuesday surrounded possible interest rate rises again, which is being reported for this year. Federal Reserve member James Bullard reportedly said that, should the Federal Reserve ‘break the ice’ regarding a rise in interest rates, then further rate rises can occur in a gradual and slow manner. The Federal Reserve tends to change certain wordings so as not to give clues regarding interest rate decisions; Bullard also stated his preference for removing the current central bank vocabulary of ‘patient’ at next month’s interest rate meeting.
Today we have ADP non-farm employment change data from the US, which is the leading indicator of non-farm employment change. We also have the non-manufacturing Purchasing Managers’ Index (PMI), which is forecasted to show growth data in all sectors excluding manufacturing, which was released on Monday.