On Tuesday during the European trading session, the US dollar remained firm against other major currencies as investors refrained from significant moves ahead of ongoing US-China trade negotiations scheduled later today in London. The May NFIB Small Business Optimism Index is the only major US economic data expected.
Over the past week, the dollar showed its strongest performance against the Japanese yen, while movements against the euro, pound, Australian dollar, and other currencies were more modest.
Market activity has been relatively subdued this week due to a lack of major data releases. Wall Street’s main indexes closed nearly flat on Monday, with the dollar index dipping slightly. On Tuesday morning in Europe, the dollar index edged above 99.00, and US stock futures remained mostly unchanged.
In the UK, data released Tuesday by the Office for National Statistics showed the International Labour Organization (ILO) unemployment rate rose slightly to 4.6% in the three months ending April, matching expectations. Meanwhile, annual wage inflation, measured by average earnings excluding bonuses, declined from 5.5% to 5.2%. Employment growth slowed to 89,000 jobs from 112,000 previously. The pound continued to weaken against the dollar, trading below 1.3550.
The euro-dollar pair remained near 1.1400 after a narrow range on Monday. Chinese Vice Premier Han Zheng said Beijing is willing to deepen cooperation with the European Union to advance bilateral relations. The European economic agenda includes the release of the June Sentix investor confidence index.
Bank of Japan Governor Kazuo Ueda reiterated Tuesday that rate hikes would be considered once there is confidence inflation is near 2%. After a volatile Monday, the dollar-yen pair traded around 144.50 in early Tuesday European hours.
The Australian dollar hovered just above 0.6500 against the US dollar during the European session. Australian data showed the Westpac consumer confidence index fell to 0.5% in June from 2.2% in May.
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