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PIG TODAY-Dollar churns against major rivals ahead of spending data

A broad measure of the dollar firmed modestly Friday, even as the greenback dipped against chief rivals, the Japanese yen and the euro, in consolidation ahead of spending data.

The ICE U.S. Dollar Index DXY, +0.03% a measure of the buck’s strength against a basket of six rivals, was up 0.1% at 100.58, trading at its highest level in about two weeks but little moved over recent trading sessions. The WSJ Dollar IndexBUXX, -0.01% which measures the U.S. currency against a bigger basket of rivals, was steady near at 90.50.

Consumer spending and sentiment data due out Friday morning could have some impact on an otherwise subdued trading session.

“The data could be crucial to the dollar rally because as Wall Street Journal pointed out yesterday there is a massive disconnect between consumer sentiment and consumer spending. While the former is near record highs, the latter remain tepid at best and may be the primary reason for bond markets lackluster reaction to the reflation trade,” said Boris Schlossberg, managing director of FX strategy with BK Asset Management. “Therefore any upside surprise in today’s data could have a strong impact on USDJPY and push it higher as the day proceeds.”

Against the yen, USDJPY, -0.07%  the dollar slipped less than 0.1% to ¥111.82, compared with ¥111.92 late Thursday in New York.

The euro, meanwhile, firmed a touch, snapping what had been back-to-back losses in reaction to reports this week that some European Central Bank policy makers oppose changing the central bank’s policy outlook. The euro EURUSD, +0.0656% was up 0.1% at $1.0683, compared with $1.0675 late Thursday in New York. The common currency hit a two-week low midweek.

Hesitation at the ECB “has started a euro decline ... as US data remains positive. Bond yields have been propped up and the dollar is a continued recovery play today,” said Richard Perry, analyst at Hantec Markets.

The pound GBPUSD, -0.1043%  fell 0.1% to $1.2452, compared with $1.2470 late Thursday in New York.

U.K. Prime Minister Theresa May triggered Article 50 of the Lisbon Treaty on Wednesday, formally beginning the U.K.’s exit from the European Union nine months after the country shocked the world by electing to leave. Investors are now waiting for the European Union’s first draft document outlining its negotiating position.

Meanwhile, the dollar gained 0.9% against the South African rand on Friday. Reports that South African President Jacob Zuma is considering leaving office early had helped support the country’s currency, the rand USDZAR, +0.6679% But in the latest developments, Zuma on Friday sacked Finance Minister Pravin Gordhan, replacing him with an ally, the Wall Street Journal reported. That intensifies the turmoil consuming Africa’s most prominent liberation movement and increases uncertainty about the country’s economy.

Gordhan, a veteran of the African National Congress’s antiapartheid struggle, was seen as a steady hand by investors, and had promised to steer Africa’s most developed economy through weak growth without further increasing government debt.

Source: marketwatch.com

A broad measure of the dollar firmed modestly Friday, even as the greenback dipped against chief rivals, the Japanese yen and the euro, in consolidation ahead of spending data.

The ICE U.S. Dollar Index DXY, +0.03% a measure of the buck’s strength against a basket of six rivals, was up 0.1% at 100.58, trading at its highest level in about two weeks but little moved over recent trading sessions. The WSJ Dollar IndexBUXX, -0.01% which measures the U.S. currency against a bigger basket of rivals, was steady near at 90.50.

Consumer spending and sentiment data due out Friday morning could have some impact on an otherwise subdued trading session.

“The data could be crucial to the dollar rally because as Wall Street Journal pointed out yesterday there is a massive disconnect between consumer sentiment and consumer spending. While the former is near record highs, the latter remain tepid at best and may be the primary reason for bond markets lackluster reaction to the reflation trade,” said Boris Schlossberg, managing director of FX strategy with BK Asset Management. “Therefore any upside surprise in today’s data could have a strong impact on USDJPY and push it higher as the day proceeds.”

Against the yen, USDJPY, -0.07%  the dollar slipped less than 0.1% to ¥111.82, compared with ¥111.92 late Thursday in New York.

The euro, meanwhile, firmed a touch, snapping what had been back-to-back losses in reaction to reports this week that some European Central Bank policy makers oppose changing the central bank’s policy outlook. The euro EURUSD, +0.0656% was up 0.1% at $1.0683, compared with $1.0675 late Thursday in New York. The common currency hit a two-week low midweek.

Hesitation at the ECB “has started a euro decline ... as US data remains positive. Bond yields have been propped up and the dollar is a continued recovery play today,” said Richard Perry, analyst at Hantec Markets.

The pound GBPUSD, -0.1043%  fell 0.1% to $1.2452, compared with $1.2470 late Thursday in New York.

U.K. Prime Minister Theresa May triggered Article 50 of the Lisbon Treaty on Wednesday, formally beginning the U.K.’s exit from the European Union nine months after the country shocked the world by electing to leave. Investors are now waiting for the European Union’s first draft document outlining its negotiating position.

Meanwhile, the dollar gained 0.9% against the South African rand on Friday. Reports that South African President Jacob Zuma is considering leaving office early had helped support the country’s currency, the rand USDZAR, +0.6679% But in the latest developments, Zuma on Friday sacked Finance Minister Pravin Gordhan, replacing him with an ally, the Wall Street Journal reported. That intensifies the turmoil consuming Africa’s most prominent liberation movement and increases uncertainty about the country’s economy.

Gordhan, a veteran of the African National Congress’s antiapartheid struggle, was seen as a steady hand by investors, and had promised to steer Africa’s most developed economy through weak growth without further increasing government debt.

Source: marketwatch.com

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