The US dollar begins the weak lower against all of its major counterparts other than the CHF and JPY after investors began to assume riskier positions late last week.
Despite continued unrest in North Africa and the Middle East, and worries over the lasting effects of the recent natural disasters in Japan, strong economic data out of a majority of the world’s major economies has investors feeling confident that the broader global growth will weather the storm.
Most significantly, the US Nonfarm Payrolls and Unemployment reports beat expectations last Friday, registering 216K and 8.8% respectively. However, while the pace of recovery in the world’s largest economy quickens, the Fed is still expected to be relatively slow in normalizing monetary policy.
With a government shutdown also looming should the US congress not agree on a final budget plan by this Friday, the USD has gravitated towards the lower end of its recent ranges against most other higher-yielding major and emerging market currencies.
There is little on the economic slate this week, with ISM Non-Manufacturing expected to remain flat on Monday, weekly jobless claims expected slightly better than last week due on Thursday, and Wholesale Inventories expected to show little change from last month on Friday.
Investors will pay keen attention to the minutes from the FOMC’s last meeting, due out on Tuesday, to glean any suggestion of tighter monetary policy in the near future.(www.ibtimes.com)