Yesterday saw the US dollar trade within a narrow range against the majority of its major partners, ending the day little changed overall against both sterling and the euro. Initial movements were positive for the US currency, gaining some ground against a slightly weaker sterling, while also moving towards the recent two-year high against the euro as the view that the US central bank’s policy was more positive than that of its European counterpart. However, disappointing data later in the day saw the dollar give back this ground. The independent non-farm employment change figure was marginally higher than anticipated, but had little impact as investors await the official figure, due out on Friday. However, the manufacturing Purchasing Managers’ Index (PMI) dropped by more than expected, taking some wind out of the dollar’s sails.
Today returns to the labour market for the only major release of the day, in the form of unemployment claims data. Alongside this, some factory orders could help to support any movements in dollar markets, as investors keep a keen eye on all areas in anticipation of interest rate decisions.