US Dollar flat with traders mulling China's retaliation on US tariffs
NEW YORK (February 4) The US Dollar Index (DXY), which tracks the performance of the US Dollar against six major currencies, is looking bleak on Tuesday after first hitting 109.00 before falling back to the lower 108.37 level in European trading. The DXY trades around 108.50 at the time of writing. Markets are reacting to a mixture of headlines with a sigh of relief from Mexico and Canada, which saw the imposition of US tariffs delayed. Meanwhile, China has retaliated against US President Trump’s tariffs by issuing its own levies over US imported goods.
The economic data calendar is taking its shape in the runup towards Friday’s Nonfarm Payrolls data. The US JOLTS Job Openings report will be released later in the day and could give more insights into the tightness of the labor market. In addition, two Federal Reserve (Fed) speakers, Atlanta Fed President Raphael Bostic and San Francisco Fed President Mary Daly, will speak and might leave comments for markets to consider.
Daily digest market movers: An eye for an eye
- China has announced this Tuesday a 15% levy on less than $5 billion in US energy imports, such as Coal and Liquified Natural Gas (LNG), and a 10% fee on American Oil and agricultural equipment, and it will also investigate Google for alleged antitrust violations, Bloomberg reports. Meanwhile, Canada and Mexico are seeing US-imposed tariffs being delayed thanks to their actions to comply with US President Donald Trump.
- At 15:00 GMT, the monthly Factory Orders for December are due. Expectations are for a further decline of -0.7% from -0.4% in the previous month.
- At the same time, the TechnoMetrica Institute of Policy and Politics (TIPP) will release its monthly Economic Optimism reading for February. The consensus is for an uptick to 53, coming from 51.9.
- The US JOLTS Job Openings for December will be released as well. A small decrease to 8 million job openings is expected, down from 8.098 million in November.
- The Federal Reserve has two speakers lined up as well:
- Atlanta Fed President Raphael Bostic moderates a conversation with Atlanta Mayor Andre Dickens at a National Housing Crisis Task Force meeting at Atlanta at 16:00 GMT.
- San Francisco Fed President Mary Daly will participate in the Walter E. Hoadley Annual Economic Forecast panel, hosted by the Commonwealth Club World Affairs of California at 19:00 GMT.
- Equities are mixed with some minor gains and losses in both European indices and US futures.
- The CME FedWatch tool projects an 86.5% chance of keeping interest rates unchanged in the Fed’s next meeting on March 19.
- The US 10-year yield is trading around 4.585%, up from its fresh yearly low at 4.46% seen Monday.
FXStreet