The US dollar had an uneventful day yesterday, rising slightly against sterling and the yen despite worse-than-forecast ISM manufacturing index figures. Despite missing its target, the index still came out at the highest level in 3 months. A lack of any other significant data meant that the US dollar remained flat against its other trader pairs, indicating this movement was mainly the cause of yen and sterling’s own weakness. With a Federal Chair stating yesterday that ‘there is still considerable slack in the economy and labour market and extraordinary support will be needed for some time’ improvements in economic performance for the US remains as crucial as ever, with improvements like a higher ISM Manufacturing index likely to raise the Federal Reserve’s forecast and lead to a strengthened US dollar.
Today we look forward to ADP Non-Farm Employment Change figures which will be a useful lead into this Fridays Non-farm Payroll Figures, a key economic indicator. Therefore any major difference from expectation has the possibility of moving the US dollar fairly quickly.
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