Dollar soars on high market sentiment over US economic forecast

SINGAPORE- US Greenback started a strong weekly session on Monday brought heavily by positive US economic data, minimizing the possibility of interest rate cuts.

The US dollar remained firm enough to reach its one week high against the euro EUR= at $1.1096. Its previous session placed it neutral from its eight-month high against Japanese yen, at 110.19 yen per dollar.

“People are just searching out good news across the world,” said Chris Weston, Head of Research at Melbourne brokerage Pepperstone.

“An emerging theme driving FX in 2020, in the absence of central bank divergence, I think, is economic divergence and relative economic trends,” he added.

Recently released statistics on Friday showed that US homebuilding advanced to 13-year high in December, with retail sector also clocking in gains and manufacturing activity recuperating from  inactivity while reaching its peak in eight months.

Current futures pricing is indicating that market thinks US Federal Reserve will not impose interest rate cuts at the end of the month.

Positive activity was mainly from reversal of European economic data. Just last week, German economy recorded its frailest progress since 2013, while British inflation and retail sales are edging down.