NEW YORK- The dollar rose extending gains after upbeat data on personal income, spending, and manufacturing in the US Midwest, with market participants also taking profits on the currency’s short dollar positions this month.
The dollar index was down 2.1 percent for the month of April, its largest monthly loss since December.
Next week’s US data, which includes non-farm payrolls for April and key US manufacturing and services indexes, should reinforce expectations of a strong recovery from the pandemic by the world’s largest economy.
“Another round of potentially strong data in the US may add pressure to start discussing tapering,” said ING in its latest research note.
“With some possible fresh weakness in Treasuries on the way, the USdollar might find some respite against the low-yielders,” the bank added.
After the Fed’s policy meeting on Wednesday, Fed Chair Jerome Powell acknowledged the US economy’s growth, but said there was not enough evidence of “substantial further progress” toward recovery to warrant a change to its ultra-loose monetary settings.
