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Dollar Continues Strong, Awaits Fed Comments

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The dollar edged up against the euro and yen on Monday continuing its rebound last week following hints from U.S. Federal Reserve officials that an interest rate hike could be introduced sooner than anticipated.

The coming week should provide investors with a series of indicators that will help gauge whether the U.S. economy is robust enough to bear a series of rate hikes.

According to Shusuke Yamada, chief Japan FX strategist at Bank of America Merrill Lynch in Tokyo, “The dollar’s near-term performance will hinge on data, notably Friday’s Japanese tankan, U.S. non-farm payrolls and the manufacturing PMI.”

Additional U.S. data to be reported this week that may impact the dollar include the core personal consumption expenditures price (PCE) index due later on Monday and Thursday’s Chicago purchasing management index (PMI).

The dollar was up 0.2 percent at 113.375 yen after touching a 12-day high of 134.400. The U.S. currency had gained 1.4 percent versus its safe-haven Japanese peer last week, pulling away from a 17-month low of 110.67. The euro inched down 0.1 percent to $1.1160 following a loss of 0.9 percent last week.

The dollar index, which gained roughly 1.3 percent last week, touched 96.368, its highest since March 16.

The Australian dollar was steady at $0.7506 having lost 1.4 percent last week and off an eight-month high of $0.7681 as commodity prices slid sharply from their recent peaks.

Fed Chair Janet Yellen will be speaking on Tuesday and New York Fed President William Dudley is scheduled to speak on Thursday.

By: DailyForex.com

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