Dollar Unable to Hold Yesterday's Gains

USD

The U.S. dollar was unable to hold on to gains it enjoyed early yesterday following strong economic data. The greenback rallied yesterday morning as consumer inflation registered higher than expected, which should put pressure on the Federal Reserve to raise interest rates sooner. Indeed, the chance for a March rate hike popped higher to 44%, up from 34% the day before. Nevertheless, the U.S. dollar has since ceded most of those gains, a sign the greenback may have carved out a top against its major rivals in the near term.

Bloomberg reports that traders say “the dollar’s inability to sustain its gains and overcome technical resistances seem to be a sign that hard details over Trump’s fiscal expansion plans are needed before the greenback stages a fresh, sustainable rally that will erase its 2017 drop.”

This morning’s economic data has been unable to move the greenback so far. Housing starts fell 2.6% in the month of January, failing to meet flat expected reading. However, building permits rose, likely negating the negative implications of poor housing starts. The Philadelphia Fed survey registered at 43.3 v. an expected print of 18.0 in February. With no data slated for release tomorrow, the greenback may fall into tight ranges ahead of the long weekend. All U.S. markets will be closed on Monday, February 20th for President’s Day.

 

JPY

The Japanese yen is up across the board on mild risk aversion after global stocks have rallied as of late. Euro Stoxx 50 is currently 0.33% lower and American stock futures point to a slightly lower open. Japan’s risk profile leaves it vulnerable to knee-jerk, haven driven gains in periods of risk aversion. 

 

AUD

The Australian dollar was unable to take advantage of a widespread sell-off of the U.S. dollar. January’s employment data was mixed. The unemployment rate fell to 5.7%, better than the expected 5.8%. Employment, overall, rose by 13,500. But a closer look at the number showed that full-time jobs fell 44,800 so the increase in overall jobs was part-time jobs.