A rise in U.S. Treasury yields and speculation that economic data in the US is likely to be upbeat gave the U.S. Dollar Index the ability to recover from its recent hard fall, the largest single day loss in more than one year. On Tuesday, the Index, which investors use to gauge the dollar’s relative strength, lost 0.9% but it was able to recover some losses and was up 0.25% in today’s trading. Analysts say that the unexpected loss can be attributed in part to hopes for a new Greek debt deal. Investors had booked profits and trimmed USD longs on growing expectations that the monetary policies would continue to diverge between the world’s major central banks, especially the Federal Reserve versus the Bank of Japan and European Central Bank.
As reported at 8:58 am (GMT) in London, the U.S. Dollar Index was trading at 93.826 .DXY, recovering from yesterday’s fall. The EUR/USD was lower at $1.1450, backing off of Tuesday’s rise to $1.1534.
Key U.S. Data Looms
This week, investors will be watching for Friday’s release of non-farms data and labor wages in the US, and if the figures meet expectations that could put the U.S. Dollar back in favor as it will raise up expectations of the Fed’s probable interest rate hike sometime later this year.