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Dollar Stabilizes Ahead of Data to Begin Week

Updated on
  • Euro Gains A Little Support
  • Brexit Continues to Hamper Pound
  • Stocks Keep Improving

The forex market is trading cautiously heading into the Tuesday trading session. The Euro has managed to hold on to some of its gains from earlier in the week as trading has slowed ahead of consumer confidence numbers to come for June. For the GBP trading has also been sluggish and although the currency has gained ground, it still remains held back by the ongoing Brexit trade border dispute between the EU and UK. On Wall Street, stocks have continued to improve on a positive start to the week with traders hoping that the movement indicates a bottom has been reached. 

Euro Holds Steady Against Dollar

The Euro has continued to hold on at higher levels than in recent weeks. The common currency still has not broken back over the 1.06 level but is better placed than it has been. The Dollar on the other hand has been slightly more sluggish than usual amid an improvement in the market mood all around. Cautious trading remains early on Tuesday as those forex trading the pair await US Consumer Confidence data for June.  

The figure is forecast to fall back to just over 100 from the previous month at 106.4. At the same time, the Michigan Consumer Sentiment survey dropped to a record low level at 50 points. This is the lowest point in the history of the poll which has been carried out for more than four decades. 

Pound Struggles as EU Battle Rolls On

The GBP/USD has continues to trade sideways now for more than a week. The pair is still held below 1.23 despite other currencies managing to gain on the USD in a more positive-looking market. The Pound has failed to gather any similar momentum as the ongoing disagreement between the UK and EU over Brexit overshadows anything else happening in the market that may be positive for the currency. The EU has already started legal proceedings. 

Also holding back the upside for Sterling is the fact that the Bank of England appears to have leaned toward a more gradual rate hike which is not particularly in line with the strategy of the US Federal Reserve or the ECB which has started to push a firmer line in recent weeks and assisted the Euro.

Stocks Continue to Improve

On Wall Street as well as at forex brokers, the market mood seems to have taken a more positive turn. The major indices in the US have continued on an upward trajectory since the beginning of the week and the futures market also is moving in positive territory approaching the opening bell Tuesday.

The Dow Jones, S&P 500, and Nasdaq all gained about 0.5% in the early hours to try and restart the comeback which faltered slightly yesterday. Traders will be hoping that the relaxation of inbound travel restrictions in China may also improve that sector.

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.