Dollar Spikes Up On U.S. Stimulus Expectations
The U.S. dollar appreciated against its major counterparts in
the Asian session on Thursday, as solid ADP private payrolls data
released overnight triggered hopes of a labor market recovery,
while the House's approval of a budget resolution cleared the path
for the COVID-19 relief plan.
Data from the payroll processor ADP showed on Wednesday that
U.S. private sector employment increased much more than expected in
ADP said private sector employment jumped by 174,000 jobs in
January after decreasing by a revised 78,000 jobs in December.
Economists had expected employment to rise by 49,000 jobs.
All important U.S. nonfarm payrolls data is due on Friday.
Economists expect the employment to increase by 50,000 jobs in
January after falling by 140,000 jobs in December.
The unemployment rate is expected to hold steady at 6.7
The U.S. House of Representatives passed the budget resolution
in a 218-212 vote on Wednesday, with the Senate vote scheduled
later this week.
After the passage in both chambers, Democrats will start
crafting a budget reconciliation bill, which would allow them to
push stimulus legislation.
The U.S. treasury yields were higher on stimulus optimism, with
the benchmark 10-year treasury yield rising to its highest in over
The greenback firmed to 1.3588 against the pound, its highest
level since January 19. The greenback is seen finding resistance
around the 1.31 mark.
The greenback climbed to near a 3-month high of 105.26 against
the yen, from Wednesday's closing value of 105.03. On the upside,
108.00 is possibly seen as its next resistance level.
The greenback strengthened to more than 2-month highs of 0.9012
against the franc and 1.2000 against the euro, from yesterday's
closing values of 0.8989 and 1.2035, respectively. The next
possible resistance for the greenback is seen around 0.92 against
the franc and 1.18 against the euro.
The greenback reversed from an early 2-day low of 0.7648 against
the aussie, with the pair trading at 0.7620. The greenback may
possibly challenge resistance around the 0.72 level.
The U.S. currency edged up to 1.2809 against the loonie from
yesterday's close of 1.2784. Against the kiwi, the greenback
bounced off to 0.7190, from its priow low of 0.7225. If the
greenback rises further, 1.32 and 0.70 are likely seen as its next
resistance levels against the loonie and the kiwi,
Looking ahead, U.K. construction PMI for January and Eurozone
retail sales for December are due out in the European session.
The Bank of England's monetary policy announcement is due at
7:00 am ET. The Monetary Policy Committee is widely expected to
hold the key rate at a record low of 0.10 percent and the
quantitative easing programme at GBP 875 billion.
The U.S. weekly jobless claims for the week ended January 30 and
factory orders for December are scheduled for release in the New