The U.S. dollar continued its trend of holding sleepy ranges again overnight despite a slew of risk events set for this week.
Indeed, the Bloomberg Dollar Index has only moved 0.1% over the past 12 hours.
This morning’s economic data was positive but has yet to help the dollar. ADP private payrolls reported an increase of 219K jobs in July, beat estimates of a 186K addition. The number perhaps foreshadows a strong employment report due out Friday morning. However, we will pay closer attention to wage growth than to the actual number of jobs created.
Later this morning, ISM manufacturing, Markit manufacturing and construction spending will all cross the wire. However, the headline event for the day remains the Federal Reserve’s FOMC interest rate decision at 2 p.m. It is widely expected that the central bank will keep current policy on hold. There will not be a press conference following the meeting.
EUR/USD continues to hold a tight rage despite risk events on both sides of the pond. European manufacturing PMI’s disappointed slightly to the downside but did not drag on the Euro’s price. As we approach the dog days of summer, the prevailing ranges may hold. From a trader’s perspective, it may take a major event to push the pair more than half a percent in the coming weeks.
The British pound ticked higher against the U.S. dollar, marking the fourth consecutive modest increase.
“Super Thursday” is tomorrow and could prove pivotal for the GBP/USD. The Bank of England is expected to raise interest rates by a quarter of point, marking the first increase in nearly a decade. In addition to the interest rate move, the central bank will release a new inflation report and hold a press conference. Traders will be looking for indications as to whether the BoE is starting a tightening pattern or of the rate hike is a one-off.