© Reuters
Investing.com – The US dollar rose strongly during trading today, Tuesday, ahead of key economic data expected this week, the most important of which will be released tomorrow, Wednesday.
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The dollar index, which tracks the greenback against a basket of six other currencies, rose 1.2% to 104,545.
All eyes are on the Federal Reserve
Most eyes will be on Wednesday’s meeting minutes and US jobs data later in the week to determine the Fed’s rate direction in the new year.
The Fed raised interest rates by 50 basis points last month, a drop in volume after four consecutive 75 basis point hikes, but said it may need to keep higher interest rates longer to tame the economy. inflation.
The dollar against the yen
While the Japanese currency pair fell 0.1% to 130.69, with the yen gaining again after climbing to its highest level in seven months against the dollar following the Bank of Japan’s decision last month to raise the ceiling on bond yields.
Adding to speculation that the BoJ was reconsidering its current monetary stance, the Nikkei report, released over the weekend, said the Bank of Japan is considering raising inflation expectations in January.
Furthermore, Governor Haruhiko Kuroda rejected the possibility of a near-term exit from ultra-expansionary monetary policy, but the central bank was forced to support the yen late last year after it hit a 32-year low against the dollar.
The dollar against the euro
Elsewhere, the US currency pair fell 0.9% to 1.0566, ahead of the release of key German inflation data, which is expected to show annualized inflation falling to 9.1% in December, from 10, 0% of the previous month.
The state of North Rhine-Westphalia – Germany’s largest by population and economic output – said annual inflation slowed to 8.7% in December from 10.4% in November and peaked at 11% in October.
However, food prices – the bulk of many households’ monthly expenses – rose another 0.5%, to 13.8% over the year. More worryingly, the headline CPI without volatile food and energy prices rose 1.0%, pushing the core annual measure of inflation to 4.9% from 4.6%.
The dollar against the pound
The USD pair fell 0.8% to 1.1951 ahead of the release of the December manufacturing PMI, which should show this major sector in contraction territory.
The risk-sensitive USD pair fell 1.2% to 0.6723.
The USD/USD currency pair rose 0.1% to 6.9045 after private survey data released on Tuesday confirmed that Chinese manufacturing activity contracted for the fifth consecutive month in December, recording 49.0 points.
This is down from last month’s reading of 49.4, and the fifth consecutive month that the manufacturing PMI has been in contraction territory.
