We started 2018 as we ended 2017 with the stock markets making fresh gains and the dollar still under pressure. It was a quiet start to the year with little flow going through in the Asian session mainly due to the Japanese public holiday but things started to liven up as the London market came into the game and we saw the dollar hit across the board against most of the majors.
There was little in the way of fundamental data releases in the London session and a weaker than expected UK Manufacturing PMI did little to slow the cable’s rise as it topped out around 1.3600. Euro made fresh highs just shy of 1.2100 and USD/JPY dropped off the cloud to find short term support just above 112.00.
Into the New York session and a much higher GDT price index print – influenced by an unusually dry, sunny summer in NZ helped to keep the Kiwi supported although it’s since retreated from it’s 0.7130 high to trade sub 0.7100 in early Asian trading.
Looking ahead to today and we are set for another subdued Asian session as Japan once again enjoys a bank holiday but once again trading should liven up as the London market comes in, we’ve got some second tier employment data out of Spain and Germany but traders will be focussing on the UK Construction PMI numbers at 8.30 pm. Into the New York session and we have the first tier 1 US data of the year in the form of the ISM Manufacturing PMI data due at 2 am which could prove a good catalyst for fresh move in the dollar.