Dollar Index Extends New Year Momentum; Holds At 3-Week High Above 102 Mark

Published on Jan 04, 2024 11:14

The dollar index extended New Year momentum as investors risk appetite faded amid skepticism around huge uncertainty that awaits markets this year. Dollar swayed ahead alongside benchmark US treasury yields that ticked higher to 3.9%. meanwhile, the dollar index that measures the greenback against a basket of currencies climbed above 102 mark yesterday and hovers around a three-week high following a less dovish Fed minutes. The minutes of the Federal Reserve`s latest monetary policy meeting reiterated officials widely expect to begin lowering rates in 2024, but they also highlighted an "unusually elevated degree of uncertainty" about the outlook. Meanwhile data yesterday showed ISM US Manufacturing PMI contracted further in December, although at slower pace. The Manufacturing PMI was at 47.4 from 46.7 in the previous reading, above the market consensus of 47.1. The closely-watched U.S. nonfarm payrolls report is due on Friday, which will likely give further clarity on how much room the Fed has to lower rates. Among the basket currencies, EURUSD and GBPUSD were marginally up at $1.0956 and $1.2674 respectively.