In light Asian trading as a result of the holiday weekend, the U.S. Dollar firmed and steadied on Monday though additional gains are likely limited as a situation in Ukraine is keeping FX traders on the edge. Despite the recent seeming success of diplomatic talks, yesterday, a number of killings in an area that is governed by pro-Russian separatists have shaken markets who are fearful of an escalation; that has helped to push safe haven currencies broadly higher.
As reported at 12:02 p.m. (JST) in Tokyo, the U.S. Dollar Index edged up to 79.871 .DXY, a gain of nearly 0.1%. The USD/JPY also moved higher, despite the fact that the Yen is usually the go-to currency during uncertainty, however news of a record trade deficit for the recently ended fiscal year is weighing on the Yen; after striking a session high of 102.63 Yen, the USD/JPY edged slightly lower to 102.58 Yen, still a 0.1% gain and a 2½ week peak. The EUR/USD steadied at $1.3813, moving away from April’s high of $1.3906.
Dollar’s Outlook Pondered
Currency strategists believe that the Dollar’s gains are also likely limited as investors await new economic data which can better confirm the Federal Reserve’s likely future direction. U.S. housing data is due to be released tomorrow and more on Wednesday, however analysts consensus is calling for a rather tepid response indicating a slow start to the spring selling season.