USD: decent day for dollar as it strengthens against euro and sterling

The dollar enjoyed a decent day yesterday, as it strengthened against sterling and the euro. It looked as if the greenback might sink to a seven-week low against the pound at one point, but it soon dusted itself down and retraced its losses. Jobless claims were slightly worse than expected, coming in at 229,000 when 225,000 had been forecast, but the house price index showed prices increased by 0.8% month-over-month in January when a 0.5% increase had been expected.

The flash reading of the Markit composite PMI came in at 54.3 against an expected 55.7; manufacturing PMI was 55.7 against an expected 55.5; and services PMI was 54.1 when 55.8 had been expected. All still show healthy growth and it is entirely possible the preliminary reading could be revised upwards later.

Today we will see the durable goods orders for February as well as the new home sales for the same month. It will be interesting to see whether the dollar can continue from where it left off yesterday and climb even higher against the euro and pound.