Even though US stocks have been struggling, sentiment continues to improve for the US dollar. The latest data has been reasonably positive. At least, it has been more positive than European data. There are expectations that the Federal Reserve will have to move forward with tapering efforts soon, and that is lending strength to the greenback.
Yesterday’s initial jobless claims report from the US Department of Labor showed a slight increase, but the overall trend in the employment situation remains positive. Indeed, analysts think that employment will only in improve going forward, and that should encourage policymakers to taper more aggressively, and consider when to raise rates.
On top of that, US housing data indicates that existing home prices were 1.3 per cent higher in April, leading some to believe that a housing market recovery remains underway. With different facets of the economy showing improvement, sentiment is in favor of the greenback right now, especially when a comparison is made to the still-floundering eurozone economy.
At 13:32 GMT the US dollar index is higher, up to 80.3740 from the previous close at 80.2540. EUR/USD is down to 1.3627 from the open at 1.3656. GBP/USD is also lower, moving down to 1.6842 from the open at 1.6871. USD/JPY is on the rise, gaining to 101.8625 from the open at 101.7340.
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