US dollar refreshes multi-month high on upbeat data
Philip McHugh October 3rd 2023 - 2 minute read
The US dollar surged on Monday, with the currency striking new multi-month highs amid rising US bond yields and stronger-than-expected domestic data.
Meanwhile, the pound is mostly rangebound so far this morning, with GBP/EUR flat at €1.1537 and GBP/USD muted at $1.2083. GBP/CAD is trading sideways at CA$1.6540, while GBP/AUD and GBP/NZD climb to AU$1.9121 and NZ$2.0422, respectively.
Coming up, could another fall in US job openings lead the US dollar to relinquish some of its gains later this afternoon?
What’s been happening?
The US dollar got off to a roaring start this week, with the currency initially rising in tandem with US Treasury bond yields.
The upside in USD was then reinforced by the release of the latest ISM manufacturing PMI. September’s figures reported growth in the US factory sector declined at a slower-than-expected pace last month.
Meanwhile, the pound wavered on Monday. The UK’s latest manufacturing PMI was revised higher in September’s finalised reading, but still painted a gloomy picture of the UK economy at the end of the third quarter.
The euro also faced headwinds yesterday. The appeal of the single currency was limited amid strong USD demand, as well as confirmation that the Eurozone factory sector remained in a deep contraction last month.
What’s coming up?
In the spotlight today will be the publication of the latest US Job Openings and Labor Turnover survey later this afternoon.
August’s figures could curtail the US dollar’s recent strength if new openings continue to fall. Any additional signs that the US labour market may be slowing could call into question any further interest rate hikes from the Federal Reserve.
In the absence of any notable EUR data, movement in the euro is likely to be driven primarily by its negative correlation with the US dollar, potentially allowing EUR exchange rates to strengthen if USD demand weakens.
UK data is also thin on the ground today, which could leave Sterling struggling to find any meaningful direction throughout the session.