USD ticks up ahead slew of economic data
Thursday 3 June, 2021
Daily Currency UpdateUSD - United States DollarDemand for the US dollar against a basket of currencies continued to tick up ahead of a batch of economic data due today and tomorrow. The US Dollar Index was up 0.42% this morning, trading at 90.29 at the time of writing. On Wednesday, the US Federal Reserve announced its plans to sell off corporate bond holdings it bought during the pandemic. The central bank announced in March 2020 that it would start buying corporate debt using its emergency lending powers. The Fed has signaled that this was not a monetary policy action. However, some investors took this as a good sign that discussions of a rate hike could happen sooner than expected.ISM Services PMI and unemployment claims are due today. After May’s shocking non-farm payroll figures were released, employment data has become a critical talking point for this month. Better than expected data should give the US dollar a short-term boost.
Key MoversThe euro continued to struggle to break above 1.22, even after data showed that there was a surge in Eurozone business activity in May. IHS Markit’s final composite Purchasing Managers’ Index (PMI) jumped to 57.1 last month from April’s 53.8, its highest level since February 2018. EURUSD was down 0.54% at 1.2144 at the time of writing. The pound failed to consolidate gains above 1.42, content to bounce between 1.4100 and 1.4200. The UK government is paying close attention to COVID-19 cases after the most recent bank holiday. Data does not yet show any substantial lift in hospitalizations in areas impacted by the new variant. The Canadian dollar and Norwegian kroner outperformed most counterparts, buoyed by an uptick in oil prices.
- EUR/USD: 1.213 - 1.221 ▼
- GBP/USD: 1.410 - 1.419 ▼
- AUD/USD: 0.766 - 0.7755 ▼
- USD/CAD: 1.203 - 1.211 ▲