While the talk yesterday was the unexpected rise in ISM manufacturing data out of the US and the resulting surge in US equites, we can see above that the dollar had already made the bulk of its losses before the US session even opened. The dollar was under pressure so early in the day as over-night data from Australia and China were really what sparked the relief rally and forced the dollar lower. The dollar traded sideways through most of the US session as players favoured to partake in the equity rally and left currencies to their own devices, to an extent.
Looking ahead, we are seeing some caution creep into the market ahead of US employment data due out today and tomorrow in the form of weekly jobless claims and NFP’s. We will see how things pan out today, but it is possible that we will see some consolidation of yesterday’s gains in equities as players refuse to enter new positions ahead of this key data.
Written by Jonathan Granby, DailyFX Research Team
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