The U.S. dollar drifted higher against its key counterparts in European deals on Tuesday amid safe-haven status, as European stocks declined on concerns over global growth, after China-led sell-off.
Worries over China continued even as China’s central bank injected about $20 billion into the money market, in a bid to support the stock market which crashed a day earlier.
Weak inflation data out of the Eurozone in December also dampened risk sentiment.
Flash data from Eurostat showed that consumer prices advanced 0.2 percent year-on-year in December, the same rate as seen in November but below the 0.4 percent rate forecast by economists.
Headline inflation has been below the European Central Bank’s target of ‘below, but close to 2 percent’ since early 2013.
Market participants focus on ADP private sector payrolls report and services sector activity for December and the Federal Reserve’s minutes of the December 15-16 meeting due tomorrow, weekly jobless claims on Thursday, along with jobs data on Friday for more indications about the U.S. economy.
The greenback showed mixed trading against its major rivals in the previous session. While the currency rose against the euro and the yen, it held steady against the franc and the pound.
In European trades, the greenback appreciated to 1.0752 against the euro, its strongest since December 3. The euro-greenback pair finished Monday’s trading at 1.0829. Further advance may lead the greenback to a resistance around the 1.06 region.
The greenback spiked up to 1.4659 against the pound, a level not seen since April 13, 2015. At yesterday’s close, the pair was valued at 1.4712. On the upside, 1.45 is possibly seen as next resistance level for the greenback.
Survey results from Markit showed that the U.K. construction sector strengthened more than expected in December.
The Chartered Institute of Procurement & Supply/Markit Purchasing Managers’ Index rose to 57.8 in December from a seven-month low of 55.3 in November.
Bouncing off from its early low of 1.0007 against the Swiss franc, the greenback firmed to near a 5-week high of 1.0101. The pair was worth 1.0019 when it closed yesterday’s trading. The next possible resistance for the greenback-franc pair may be located around the 1.02 level.
The greenback edged up to 0.7166 against the aussie, off its previous low of 0.7215. The greenback is likely to challenge resistance around the 0.70 mark. The aussie-greenback pair closed deals at 0.7189 on Monday.
The greenback rallied to 0.6695 against the NZ dollar, nearly a 3-week high. At Monday’s close, the pair was valued at 0.6749. If the greenback extends uptrend, it may challenge resistance around the 0.655 mark.
On the flip side, the greenback remained weaker against the Japanese yen, with the pair trading at 118.82. The greenback finished yesterday’s trading at 119.43 per yen.
Data from the Bank of Japan showed that Japan’s monetary base jumped 29.5 percent on year in December, coming in at 346.379 trillion yen.
That follows the 32.5 percent spike in November.
Looking ahead, Canada industrial product price index for November is due in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com