Signs of a Dollar Recovery After Stronger US Data

We saw the first decent bounce in the greenback for a while yesterday as the ISM Manufacturing PMI data came out much stronger than expected this helped the dollar recover against most of the majors. We also had the Fed Meeting Minutes which were also more dollar supportive as the FOMC acknowledged that the tax reform plan could lead to topside inflationary pressure across the US economy.

We had seen a distinct slowing of the downside move in the dollar earlier in the day before the US numbers with most of the majors starting to run out of steam and the market very much aware of the Non Farm Payrolls Data coming out at the end of the week.

The Cable had a good move to the downside as a weaker than expected Construction PMI print combined with the upturn in the Usd to take it down over a big figure on the day. The Euro also dropped off of some key technical levels just under 1.2100 to find some short term support around 1.2000. UsdJpy will be a focus early today as we welcome the Japanese market back after a couple of days off with many traders looking for further topside in line with the change in short term dollar sentiment and continued strong equity markets.

It’s quiet once again through the Asian session in terms of economic releases today with just the Chinese Caixin Services PMI numbers due, but the London open see’s a raft of Services PMI releases from across Europe culminating in the UK data at 8.30 pm. We have the ADP Non Farm numbers early in the New York session as well as the weekly US unemployment and Crude Oil Inventory numbers. These will all be very much the front runner for tomorrows Non Farm data and we may well see some more profit taking flow coming through the market ahead of that.

Rakuten Securities Australia Review