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Dollar Performs Slowly in Forex Markets as Banks Re-Open

The US dollar struggled to find itself back on top as banks in the US reopened following a public holiday.

The currency managed to hold firm, but it failed to pick up the momentum needed to surge ahead. The dollar index, which monitors how the currency is performing compared to several other international currencies, barely moved from its position of 96.881.

This was due in large part to expectations that the trade talks between China and the US were continuing to go well.

For the dollar, which often surges during times when traders choose to avoid risk, this renewed hope perhaps stimulated investors towards a less risk-averse position.

The single European currency dropped by 0.1% and reached the $1.1298 level. This came after a welcome upwards move of 0.16% over the course of the night.

Now that the two major North American public holidays of Family Day in Canada and President’s Day in the US are over and banks are open again, the economic calendar is back in full swing.

Today (Tuesday) sees a number of central banker speeches, for example. At 1.50pm GMT, the Chief Executive of the Federal Reserve Bank of Cleveland and a member of the Federal Open Market Committee Loretta J. Mester will speak.

Shortly afterwards at 3pm GMT, a member of the European Central Bank’s Executive Board Peter Praet will also speak.

Also, today will include a series of important data releases covering the Japanese trade balance in January. Export data is due out when the figures are released at 11.50pm GMT. These are expected to show a change from -3.9% to -5.5%.

Overall, the adjusted merchandise trade balance for January is expected to show a drop from -183.6 billion yen to -290.5 billion yen.

Looking ahead to Wednesday, January’s producer price index from Germany is expected at 7am GMT. It is believed that this will show a month on month change from -0.4% to -0.2%.

Swiss industrial production figures for the fourth quarter of last year are due at 8.15am GMT. Quarter on quarter, these were last recorded at -7.7%.

Preliminary European consumer confidence data for February is expected at 3pm GMT. This is due to show a slight move from -7.9 to -8.

The main event of the day will be the release of the Federal Open Market Committee’s minutes at 7pm GMT. Dollar traders will be likely to keep a close eye on this release in case it reveals any insights into where the Federal Reserve might go next.

On Thursday, Australian employment change data for January will kick off the day when it is released at 12.30am GMT. It is believed that this will show a change from 21,600 to 15,000.

The harmonised index of consumer prices for the month of January will be out of Germany at 7am GMT. In a development which will presumably calm the nerves of those who are still worried about Germany’s economic performance, this is due to remain steady at 1.7%.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.


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