US Session – Dollar reverses losses against yen after strong ISM service sector data
November 5, 2013 8:35 pm
The US dollar made a sharp turnaround against the yen after better-than-expected ISM non-manufacturing data. The index indicated that the US service sector grew in October, bolstering the probability that the Federal Reserve could begin tapering stimulus sooner than March 2014, as was previously thought.
The ISM non-manufacturing index rose a full point from September to October, printing a reading of 54.4. This follows a strong result from last week’s the ISM manufacturing index. Focus now turns to nonfarm payrolls on Friday.
USDJPY gained 0.27% to end the US session at 98.57. EURUSD slipped 0.15% to 1.3473.
Aside from the stronger dollar, the euro was pressured by speculation that the European Central Bank may cut interest rates soon, if not at Thursday’s policy meeting then by December. Concerns were raised due to recent data showing soft inflation in the Eurozone, which raises alarm bells for disinflationary pressures. Meanwhile, the European Union today lowered its growth outlook for this year as well as for next year.
Sterling held onto gains made against the dollar and the euro on the back of strong UK service sector PMI data which hit a 75-year high in October. A string of upbeat UK data recently has raised expectations that the Bank of England could hike interest rates sooner-than-expected.
GBPUSD hit a high of 1.6061 but ended the US session slightly lower at 1.6046, down 0.09%. The main driver for sterling will be the Bank of England policy meeting on Thursday.
The US dollar made a sharp turnaround against the yen after better-than-expected ISM non-manufacturing data. The index indicated that the US service sector grew in October, bolstering the probability that the Federal Reserve could begin tapering stimulus sooner than March 2014, as was previously thought.
The ISM non-manufacturing index rose a full point from September to October, printing a reading of 54.4. This follows a strong result from last week’s the ISM manufacturing index. Focus now turns to nonfarm payrolls on Friday.
USDJPY gained 0.27% to end the US session at 98.57. EURUSD slipped 0.15% to 1.3473.
Aside from the stronger dollar, the euro was pressured by speculation that the European Central Bank may cut interest rates soon, if not at Thursday’s policy meeting then by December. Concerns were raised due to recent data showing soft inflation in the Eurozone, which raises alarm bells for disinflationary pressures. Meanwhile, the European Union today lowered its growth outlook for this year as well as for next year.
Sterling held onto gains made against the dollar and the euro on the back of strong UK service sector PMI data which hit a 75-year high in October. A string of upbeat UK data recently has raised expectations that the Bank of England could hike interest rates sooner-than-expected.
GBPUSD hit a high of 1.6061 but ended the US session slightly lower at 1.6046, down 0.09%. The main driver for sterling will be the Bank of England policy meeting on Thursday.
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