The US dollar climbed against its major trading partners early Tuesday, with the exception of the yen, ahead of the release of November international trade statistics.
The National Federation of Independent Business’ attitude index showed an increase in the outlook for economic expectations and business earnings earlier Tuesday, but there was still more pessimism than optimism.
The total NFIB index was the highest since July and higher than a year earlier, although it was still significantly below pre-COVID levels. A cursory review of foreign currency activities leading up to Tuesday revealed that USD-EUR fell to 1.0931 from 1.0950 at the Monday US close and 1.0938 at the same time Monday morning. The EU unemployment rate fell in November, data released earlier Tuesday showed. The next European Central Bank meeting is set for Jan. 25.
GBPUSD fell to 1.2715 from 1.2748 at the Monday US close but was above a level of 1.2711 at the same time Monday morning. There are no UK data on Tuesday’s schedule. The next Bank of England meeting is set for Feb. 1.
USDJPY fell to 144.1035 from 144.2381 at the Monday US close and 144.6288 at the same time Monday morning. Tokyo consumer price growth, an early indicator of Japan’s consumer price index, slowed in November, according to data released overnight.
Separately, Japanese household spending declined in the same month. The next Bank of Japan meeting is scheduled for Jan. 22-23.
USDCAD rose to 1.3367 from 1.3348 at the Monday US close but was below a 1.3384 level at the same time Monday morning. Canada building permits and trade data for November are scheduled to be released today. The next Bank of Canada meeting is set for Jan. 24.
U.S. CPI inflation data for December, due for release on Thursday, could significantly affect the dollar’s trajectory, says Vikas Lakhwani, chief revenue officer at CPT Markets. Dangote Reacts to EFCC Visit to Headquarters
The U.S. dollar has stabilized for now as expectations for a March rate cut by the Federal Reserve have diminished, reducing pressure on the currency while recent labour market data indicate a more robust economy, he says in a note.
The fact that markets continue to expect multiple rate cuts this year “could remain a risk for the dollar over the medium term,” however. The DXY dollar index rises 0.2% to 102.405.
