U.S. Dollar Advances On Fed Policy Outlook
Singapore (Dec 3) The U.S. dollar strengthened against other major currencies in early Asian deals on Tuesday as upbeat data on U.S. manufacturing stocked concerns about the timing of winding down of asset purchase program.
Data from the Institute of Supply Management showed yesterday that the U.S. manufacturing sector activity expanded to 57.3 percent in November, highest reading since November 2011. The U.S. construction spending for October was at a seasonally adjusted annual rate of $908.4 billion, 0.8 percent above the September estimate of $901.2 billion, the Commerce Department reported yesterday.
These upbeat data coupled with last week's positive reports on U.S. jobless claims and consumer confidence raised investor speculation that the Federal Reserve may pullback its monthly bond buying program soon.
The non-farm payrolls for November due on Friday would provide further clues regarding the Fed's course of monetary policy.
The greenback that closed Monday's deals at 0.9086 against the franc reached as high as 0.9100. If the greenback rises further, it may seek resistance around the 0.92 mark.
The greenback spiked up to 103.15 against the yen, a level not seen since May 20. The next likely upside target for the greenback lies around the 104.00 zone.
The monetary base in Japan spiked 52.5 percent on year in November, the Bank of Japan said today, standing at 189.724 trillion yen.
That follows the 45.8 percent jump in October and the 46.1 percent surge in September.
The greenback advanced to a weekly high of 1.3523 against the euro, up from Monday's close of 1.3540. Further bullish trend may lead the greenback to target resistance around the 1.34 zone.
The greenback rebounded to 1.6346 against the pound, from an early low of 1.6364. On the upside, the greenback may aim resistance at the 1.62 level.