The dollar index notched up its best day of gains since the middle of November yesterday, supported by an impressive ADP employment report and a solid ISM reading. The string of positive US data recently certainly suggests that the recovery is finally beginning to take hold and the economy is gaining some momentum. USD bulls will likely wait for NFPs on Friday before releasing the full force of their bullish leanings on the buck, a strong reading could see an intense dollar rally. Nonetheless, the index climbed back above the key 80.00 and held its ground above the level in Asian trade, which certainly bodes well for further gains into the last few sessions of the week.
Over-night trade has been very subdued as Asia/Pacific equities trade mixed, commodities trade in narrow ranges and major currencies move sideways. This isn’t unusual as we approach the NFP report, due Friday, but is likely to make for lackluster trade until the release.
Written by Jonathan Granby, DailyFX Research Team
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