The US dollar advanced against a collection of major counterparts Monday, sustaining the recent upturn and rallying for a fourth consecutive trading session. The dollar found support in upbeat US-China trade rhetoric while an uptick in bond yields helps fuel demand for the world’s base currency. The Gap between US and Germany bond yields has widened throughout the first two months of the year, ensuring the USD remains an attractive yield play, while weighing on the Euro.
Trade remains a key driver for medium- and longer-term USD fortunes, with the drag on global growth starting to permeate the US domestic economy. China and the US appear to be on the brink of a deal that would roll back tariffs on a large portion of Chinese imports, reducing the friction that has acted as a drag on growth through the last 12 months. The dollar index pushed nearer 97 touching 96.68 with bullish bets increasing to their highest level in four weeks.
Attentions now turn to key services data for direction through Tuesday, while Fed commentary and Non-Farm Payroll numbers guide a broader weekly bearing.