The dollar finished 2017 firmly on the back foot with the dollar index trading down around 92.20 as we enter the first trading day of 2018. It was very much a ‘buy the rumour, sell the fact’ trading situation with regard to the US tax reform package and the market will now evaluate all economic data out of the US going forward to see just how well the plan is working.
It should be a relatively quiet start to the week and indeed the year with the Japanese on holiday for the next couple of days and the rest of the market getting back into the swing of things after the Christmas and New Year festivities. Liquidity should return to normal levels very quickly as we move through the week and we should start to see the return of more normal trading conditions as traders look to hit the new year running.
The main focus this week will be on the first Non Farms of the year on Friday but we’ve got some fundamental economic data coming before that which could create opportunities in the currencies. First up today we have a relatively quiet session in Asia but things should kick off in the London session with the UK Manufacturing PMI data due out at 8.30 pm. It’s quiet into the New York session although we do have the first GDT Price Index release of 2018 which could see the Kiwi move.
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