USD Higher on Monday After Strong Data

The dollar rose on Monday, reversing the previous session’s losses, as the currency benefited from a generally positive U.S. backdrop such as rising interest rates, at a time when other major central banks are either on hold or in policy-easing mode.

“We think U.S. fundamentals remain solid, may improve further still, if the president can make some quick progress on tax reform,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.



He said U.S. interest rates are poised to continue rising steadily this year, even if Federal Reserve officials said the Fed is in no particular rush to tighten policy.

U.S. construction spending and manufacturing data on Monday were positive overall, affirming the economy’s steady improvement. Construction spending grew 0.8 percent to $1.19 trillion, the highest level since April 2006. The Institute for Supply Management’s manufacturing index, on the other hand, was 57.2 in March, with components such as the prices paid and manufacturing indexes notching their highest readings since May and June 2011, respectively. The dollar’s gain has also been helped by the euro’s early struggles on Monday. The euro hit a three-week low against the dollar mixed economic data coming out of Europe added to existing worries about political risk in the euro zone.

The single euro zone currency, however, was last up 0.2 percent at $1.0664 .

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza