The US dollar held a slim overall gain in trade that was subdued by a UK public holiday. The US currency concluded the previous week on a down note after poor housing data suggested any rollback in Fed stimulus next month might be more modest in scope. The euro was largely steady against its rivals yesterday. The euro this week should take some cues for a host of business confidence surveys from Germany and France. Next week also looms importantly for the single currency, when the European Central Bank holds its next policy meeting. Canada’s dollar held above Friday’s one-and-a-half-month lows but it may struggle to outperform ahead of key quarterly growth data due out on Friday. Generally weaker global stocks weighed modestly on the Aussie dollar.
Euro
The euro got off to a steady start with currencies down a catalyst, with markets in Britain shuttered for a public holiday. The euro has largely waxed and waned in recent sessions – finding support in a rapid unwinding of carry trade bets on emerging market currencies such as the ones from India, Indonesia and Turkey (to name a few) that were funded in the lower-yielding single currency, but pressured by elevated market expectations the Fed might soon slow monetary stimulus.
Sterling
Sterling was on a short leash with area markets closed yesterday for a public holiday. The pound appeared to enter a consolidation phase late last week following a tear of a rally that had lifted it to nine-week peaks against the greenback. Underpinning the pound has been mounting evidence of a broadening recovery in Britain. Consequently, investors see leaks in Bank of England views that area borrowing rates may stay anchored for years to come.
US dollar
The dollar surrendered a slim overall lead against its rivals after the US economy followed up a poor housing report on Friday with similarly discoursing news on durable goods orders last month. The week ahead will be rich on news about the US consumer, the main engine that drives the economy. Still, this week may take a back seat in terms of market importance to data a week from Friday on the US job market, a sector that plays an outsized role in shaping Fed policy plans.