Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Dollar Up From Five-Month Low, Investors Await Key U.S. Economic Data

Published 06/02/2021, 01:30 AM
Updated 06/02/2021, 01:36 AM
© Reuters.

© Reuters.

By Gina Lee

Investing.com – The dollar was up on Tuesday morning in Asia as it edged back from near a five-month low. Investors continued to bet the U.S. Federal Reserve will change its stimulus measures sooner than expected after positive economic data was released on Tuesday.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.11% to 89.920 by 1:28 AM ET (5:28 AM GMT).

The USD/JPY pair was up 0.25% to 109.72.

The AUD/USD pair edged down 0.09% to 0.7747 after Australia released a better-than-expected Gross Domestic Product earlier in the day. The GDP rose 1.8% quarter-on-quarter and 1.1% year-on-year for the first quarter of 2021. The NZD/USD pair inched down 0.10% to 0.7248.

The USD/CNY pair inched up 0.06% to 6.3832. Investors continue to monitor the recent bullish yuan after the People’s Bank of China tightened banks’ forex reserve requirements to curb the yuan’s appreciation. The restrictions caused the offshore yuan to retreat from its three-year high of 6.3526 hit on Monday.

The GBP/USD pair inched up 0.01% to 0.4148, with Bank of England Governor Andrew Bailey due to speak later in the day.

"The direction of the dollar is definitely the focus," Shinichiro Kadota, senior currency strategist at Barclays (LON:BARC) in Tokyo, told Reuters, adding that “the market is split in its view.”

Some U.S. Federal Reserve officials insisted that the price pressure will be temporary, while some investors remained concerned that potential runaway inflation will eventually force the central bank to change its current dovish monetary policy earlier than expected.

"Even if inflation continues to overshoot, I think the Fed will continue to say it’s temporary, but the market won't know for sure until fall, so we’re kind of stuck in this uncertainty," said Kadota.

In the U.S., data released on Tuesday said the Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rose 61.2 in May, driven by a boosted demand amid a reopening of businesses. It’s better than the 60.9 figure in forecasts prepared by investing.com and April’s 60.7 reading. However, the data also indicated supply shortages and labor constraints.

Investors now await further U.S. data, including non-farm payrolls, due on Friday for clues on the economic outlook. Its much-weaker-than-expected reading in April led the dollar to slump 0.7% on May 7.

Latest comments

hi
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.