The first Monday of the month tends to be quite exciting for the US dollar and this month was no different. Even though US data releases were not up to expectations, the US dollar, on a trade weighted basis against a basket of currencies, reached a 11 year high during the course of Monday.
Personal spending and personal income data were both slightly less than forecast – these are key figures for the Federal Reserve decision on when to increase US interest rates, as pointed out by Federal Reserve Chair Yellen. The manufacturing Purchasing Managers’ Index (PMI) dropped slightly against expectations, but still showed growth in the sector. However, despite these disappointing figures the US dollar gained ground against sterling and was slightly up against a buoyant euro by the end of the day.
Today, we see a quiet day for US data releases. However, the key spotlight for now will be indications of when the Federal Reserve may make their first move in raising the interest rate, with recent members split on an early or late rise within the year.