020 7898 0500The US dollar had a strong start to the week yesterday, as positive data supported hopes of an interest rate rise. The manufacturing Purchasing Managers Index (PMI) from the Institute for Supply Management showed a better-than-expected expansion, which helped the dollar make gains against the majority of its major partners. The US currency rose to its strongest in almost seven years against the Japanese yen, whilst also reaching fresh two-year levels against the euro, as the optimism over the US economy helped against the perceived weaker counterparts.
Today sees just the one major release from the US to potentially impact markets, in the shape of the trade balance. Further positive results could increase the optimism over potential interest rate rises, which would help the dollar to continue to strengthen. In the second half of the week we expect a raft of data which will be closely scrutinized to see if it sheds any light on this debate.
