In subdued trading as a result of holidays in the U.K. and Japan, the U.S. Dollar remained essentially and broadly flat even in spite of recent improved economic data. An upbeat ISM report with a reading that exceeded forecasts for April seems to suggest that the economy in the U.S. is finally emerging from the doldrums and slowdown induced in large part by a harsh winter. Analysts don’t expect to see much movement in the greenback given the lack of key data to provide momentum as well as the fact that Japan’s market remains closed.
As reported at 11:23 a.m. (JST) in Tokyo, the U.S. Dollar Index steadied at 79.501 .DXY, remaining within a tight trading band of 79.433 .DXY at the lower end and 79.527 .DXY at the upper; the Index remains well off Friday’s high of 79.852 .DXY which occurred after the positive labor data release. The EUR/USD firmed at $1.3875, also trading within a narrow range, while the USD/JPY held at 102.15 Yen.
RBA Maintains Status Quo
Meanwhile, the Reserve Bank of Australia announced that it would leave its benchmark interest rates unchanged at the current 2.5% and said in their accompanying statement that they were largely satisfied with the pace of inflation which slowed. The RBA governor pointed out that labor figures improved though further evidence was needed to show a consistent decline in unemployment. Immediately after the announcement, the AUD/USD traded at $0.9294, a gain of 0.5% and adding to the 4% rise in the Aussie Dollar this year.