The US dollar strengthened over the euro by 1.91 cents yesterday to close the day at 1.2847. A report on the health of the US manufacturing sector showed that activity had not fallen as much in January as expected, which gave the dollar some strength. Coupled with this was news that US private sector job losses had slowed slightly in January. The euro's position was also undermined by news of a downgrade in Russia's sovereign debt due to low commodity prices, dwindling reserves and corporate debt problems.
In today's trading the dollar has pushed slightly lower but the rate has steadied ahead of the ECB's interest rate announcement at 12.45 GMT this afternoon. Investors expect the central bank to keep interest rates on hold at 2% this month, with further cuts potentially made at a later date. Other announcements in the eurozone include German Factory Orders figures, whilst in the US Jobless Claims, Nonfarm Productivity and Factory Orders data is released.
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