USD Steady Despite Weak Factory Data

Greenback Holds Ground As Investors Await More Updates From The Federal Reserve

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The U.S. dollar was mostly higher on Wednesday even as investors remained cautious of news from North Korea that it has test-launched a ballistic missile that could be fired in the United States. The country released a statement on Tuesday regarding its successful launch of a ballistic missile that reportedly landed in Japanese waters. However, North Korean leader Kim Jong Un said in a statement that they are now in a proud nuclear state that can fire anywhere in the world.

Most European and Asian stocks were down on Tuesday after the report without influence from the US markets due to the Independence day holiday. However, the US currency remains unfazed as the Wall Street resumed the regular market session.

The positive U.S. manufacturing data released on Monday revealed that U.S. factory activity has jumped to a three-year high that was perceived as a sign of a recovering economy by the markets sending the US dollar up on Monday. The Institute for Supply Management also showed that its national factory activity rallied by 57.8 last June which is their best performance in nearly three years.

The euro also lost ground against the US dollar after the European Central Bank announced that discussions regarding policy changes between the governing council have not begun. Last week, the markets expected that European and Canadian central banks are preparing to join the Federal Reserve in another interest rate hike.

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U.S. Dollar Movement

The U.S. dollar index that measures the currency’s strength against a basket of other major currencies rallied by 0.13% to a one-week high at 96.12. The dollar continued to rally as it rallied by 0.22% against the Japanese yen to 113.53 which is the highest since last May.

The euro also lost ground against the greenback despite being boosted to a 14-month high by hawkish European Central Bank comments regarding its stimulus program. The EUR/USD is now down by 0.13% to a one-week low.

The Australian dollar was also down by 0.11% against the USD. The US dollar also rose 0.25% against the Canadian dollar from a ten-month low as the US currency continued to recover on weak oil prices that affected the Canadian dollar.

The greenback is now at a one-week high mostly against other major currencies despite the uncertainty brought by factory orders data and the missile test from North Korea.

By Thursday, the currency held its ground was mostly positive due to Treasury yields hitting multi-week highs as the AUD recorded new lows due to continuous oil price declines.

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