Positive data supports US dollar
Yesterday was a positive one for the US dollar as positive data from the country spurred some gains for the US currency. The December producers’ price index registered its highest rate of growth in six months, with a 0.4% increase from the November figure, while the Empire State manufacturing index also presented a strong expansion. These strong signs of economic growth for the US increased belief that tapering of the quantitative easing programme will be extended at the next Federal Reserve meeting, with monthly bond-buying levels being reduced further. This optimism caused the US dollar to reach its highest point since mid-December against sterling while also recovering from a two-week low against the euro. Further key figures are expected stateside today in the form of a consumer price index (which will reflect inflation levels), unemployment claims from the labour market and Philadelphia Federal Reserve manufacturing index figure; Federal Reserve chairman Ben Bernanke will also be making a speech. Investors will continue to scrutinise data closely for evidence in support of tapering while also looking for clues from Federal Reserve members as to their views on what might happen. Call your trader now for the latest US dollar rates, as the outlook brightens.