The US Dollar takes caution ahead of economic data. The market started the week on a steady note, recovering from a weak performance on Friday. The recovery was driven by the release of US Personal Consumer Expenditures (PCE) numbers, which were slightly better than market expectations.
This encouraged investors to shift their focus away from the possibility of only one interest-rate hike and instead focus on Federal Reserve Chairman Jerome Powell’s affirmation of at least two rate hikes.
As a result, the US dollar gained against most currencies on Monday and continued the correction brought about by the PCE numbers. The start of this week’s trade has been affected by the upcoming National holiday.
As a result, the New York Stock Exchange will be closed from Monday to Tuesday. Despite this, traders must stay informed about important events. They should keep an eye on data releases on the Manufacturing Sector, the employment subindex, and other key indicators.
In addition, US Treasury Secretary Janet Yellen is scheduled to visit China to foster stronger ties between the two countries. This is vital in ensuring economic stability and cooperation between the two governments.
The report released by ISM will provide insight into the performance of the Manufacturing sector, allowing investors to assess the current monetary landscape. The Purchasing Manager Index (PMI) and subindexes such as the Employment Index will give investors an indication of the Manufacturing sector’s health.
Feds Policy Impact
The Federal Reserve’s (Fed) monetary policy decisions have far-reaching implications for the value of US Dollar (USD). Interest rate adjustments can either bolster or weaken the USD, depending on the Fed’s objectives for inflation and employment.
Similarly, Quantitative Easing (QE) and Quantitative Tightening (QT) actions can shape the USD’s performance, with QE generally regarded as USD-negative and QT as USD-positive.
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