Dollar in tight range ahead of US services sector data

The dollar held steady against most currencies on Monday as investors awaited data expected to show the U.S. services sector stopped contracting, and highlighting the economic recovery from the coronavirus pandemic.

FILE PHOTO: A U.S. Dollar note is seen in this June 22, 2017 illustration photo.

TOKYO: The dollar held steady against most currencies on Monday as investors awaited data expected to show the U.S. services sector stopped contracting, and highlighting the economic recovery from the coronavirus pandemic.

The euro moved in a narrow range before economic data from Germany and the eurozone that are also forecast to show a sharp rebound in corporate activity and retail sales, which would ease concerns about the economic outlook.

A steady rise of new coronavirus infections in the United States has discouraged some investors from taking on excessive risk, but most market participants remain focused on the growing likelihood that major economies will continue to recover.

“When it comes to dollar/yen, recovery expectations are supporting the dollar, but worries about the virus are capping the upside,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“The markets are focused on other currency pairs, like the Australian dollar, which is still in a clear uptrend against the U.S. dollar due to the rise in copper prices.”

The dollar held steady at 107.56 yen on Monday in Asia following a 0.3per cent gain last week. Market activity was subdued following the July 4 long weekend holiday in the United States.

The euro changed hands at US$1.1247. Against the British pound, the common currency bought 90.18 pence .

Sterling moved in a narrow range at US$1.2474.

Against the Swiss franc, the dollar was quoted at 0.9455.

The Institute for Supply Management’s index for non-manufacturing activity due later on Monday is expected to rise to 50.0 in June from 45.4 in the previous month, indicating activity stopped shrinking.

The greenback has been locked into narrow trading ranges recently as concerns about a resurgence in U.S. coronavirus infections offset growing optimism about the economy.

The euro will come into focus later in the trading day as Germany, the euro zone’s largest economy, is scheduled to release industrial orders for May.

Retail sales for all of the eurozone will also be released later on Monday. Both indicators are forecast to recover strongly from large declines caused by the spread of the coronavirus.

Elsewhere in currencies, the Australian dollar traded at US$0.6944 on Monday in Asia following a 1.2per cent gain last week.

The Aussie is another market focus ahead of a Reserve Bank of Australia (RBA) policy meeting on Tuesday. Analysts expect that rates will stay at 0.25per cent amid signs that Australia’s economic downturn will not be as dire as first feared.

Recent gains in prices of copper and other commodities that Australia exports, combined with a more positive tone for the RBA, are likely to support the Aussie, analysts say.

Across the Tasman Sea, the New Zealand dollar was quoted at US$0.6535.

Z24 News

Leave a Reply

Your email address will not be published. Required fields are marked *

Next Post

Saudi Arabia announces Haj health measures for domestic pilgrims

Sun Jul 5 , 2020
RIYADH: Saudi Arabia has announced health protocols to prevent the spread of the new coronavirus in the 2020 Haj season, banning gatherings and meetings between pilgrims, the state news agency said on Monday (Jul 6). Saudi Arabia decided in June to limit the number of domestic pilgrims attending the Haj […]

Share

Social menu is not set. You need to create menu and assign it to Social Menu on Menu Settings.