US Dollar Struggles for Traction in Asian Trade

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Dollar weekly gainThough struggling for traction currently, the US Dollar is still poised to record the highest weekly gain since November, boosted by growing market confidence that an economic recovery likely to outpace peers is in the making. In overnight Asian trading, the US Dollar Index traded just off a 2-month peak given recent signs that the US labor market may be more resilient than previously thought. What markets will be watching closely is the release of January’s private sector labor data from the US Department of Labor. Also helping to provide a boost to the greenback is news that the Biden administration looks to have the backing of a majority of the US Congress, enough to push through President Biden’s Coronavirus relief package.

In Tokyo trading as of 9:40 am, the EUR/USD was higher at $1.1968, a gain of 0.0502%, off the session high of $1.19726. The GBP/USD was also trading higher at $1.3683, up 0.1193%; the pair has ranged from a low of $1.36550 to a peak of $1.36907. The USD/JPY was lower at 105.4930 Yen, down 0.03%, off the session trough of 105.456 Yen.

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In Asian trade, the Reserve Bank of Australia revised its growth forecast for the Australian economy, but appears hesitant to increase rates; analysts don’t expect to see any upward movements to rates for at least another two years. It was also reported earlier by the Australian Bureau of Statistics that December’s retail sales were slightly off predictions, coming in at -4.1% against a forecast of -4.2%. After the report, the AUD/USD was trading lower at $0.7594, down 0.0868%, off the session trough of $0.75901. The NZD/USD was also lower and priced at $0.7154, down 0.0112%; the pair has ranged from a low of $0.71504 to a peak of $0.71676 in today’s session.

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