US Dollar Edges Up Against Majors
The US dollar firmed up against its major rivals on Tuesday morning in Asia. The greenback thus recouped some of its previous session’s loss against most majors.
Buoyed by a positive close on Wall Street overnight and some encouraging economic reports, Asian stock markets are mostly trading higher today. Though some of the markets in the region have pared early gains and are trading below or around the unchanged lines, the mood remains somewhat bullish at present.
Among the markets in the Asia-Pacific region, India, Indonesia, New Zealand, Australia, Taiwan, Malaysia and Singapore are up with notable gains. However, Japan, Shanghai and Hong Kong are trading weak.
Yesterday, the U.S. Commerce Department said that personal spending rose by 0.5 percent in January after rising by an upwardly revised 0.3 percent in the previous month. The increase exceeded economist estimates for 0.4 percent growth.
At the same time, personal income edged up by just 0.1 percent in January following a downwardly revised 0.3 percent increase in December. Economists had expected income to increase by 0.4 percent, matching the growth originally reported for the previous month.
Also, the Institute for Supply Management’s index of activity in the manufacturing sector fell to 56.5 in February from 58.4 in January, with a reading above 50 still indicating growth in the sector. Economists had been expecting the index to show a more modest decrease to a reading of 58.0.
The US dollar that closed yesterday’s deals at 89.14 against the Japanese yen drifted higher to 89.36 around 11:00 pm ET. On the upside, the greenback-yen pair may find resistance around the 89.50 level in near-term. The pair is presently quoted at 89.33.
Japan’s unemployment report released earlier in the day likely influenced the yen. The jobless rate came in at a seasonally adjusted 4.9 percent in January, beating expectations for a steady performance after showing 5.1 percent in December.
Commenting on the data at a regularly scheduled press conference,Japanese Finance Minister Naoto Kan said the numbers show that the labor market is “improving somewhat.”
The dollar trended higher and reached a high of 1.4905 against the pound around 11:15 pm ET. The greenback that was worth 1.4992 against the pound at Monday’s North American close is currently quoted at 1.4915. If the buck ticks up further, 1.4880 is seen as the next target level.
Against the euro also, the greenback trended higher and reached as high as 1.3515 around 11:15 pm ET. In near-term, resistance is likely to be seen around the 1.35 level for the buck. The euro-dollar pair that ended yesterday’s deals at 1.3561 is presently quoted at 1.3525.
The US dollar advanced to 1.0832 against the Swiss franc around 11:15 pm ET, compared to Monday’s New York session closing value of 1.0795. On the upside, resistance level is likely to be seen at 1.0840 for the greenback. The dollar-franc pair is now trading at 1.0824.
Looking ahead, the Swiss Gross Domestic Product report for the fourth quarter is slated for release at 1:45 am ET. While the Swiss economy is expected to expand 0.4 percent on quarter, year-on-year contraction is anticipated to have narrowed to 0.5 percent.
The Italian and the euro-zone consumer price indexes for February will be made public in the upcoming European session. The euro-zone producer price index for January is also on tap in the session.
In the North American session, the economic calendar is light, with speeches from Boston Federal Reserve Bank President Eric Rosengren and Minneapolis Federal Reserve Bank President Naranyana Kocherlakota likely to be in focus for the markets.
