In terms of currency, the dollar was on the rise. After being on the back foot for much of the holiday season, the dollar gained 0.8% against the euro, pound, and yen yesterday. The dollar benefited from the risk-averse environment.
Today’s US data releases include the December ISM manufacturing index. For the 13th month in a row, it remained below the critical 50 mark, indicating a contraction in activity. That is likely to have continued in December, though the rate of decline may have slowed
The November JOLTs survey of labour market turnover will also be issued, offering more insight on labour market conditions in the aftermath of stronger-than-expected job growth. Elsewhere on the data schedule, there are no significant releases in the UK.
The current Fed meeting minutes will be closely scrutinised in terms of monetary policy. Following Chair Powell’s dovish remarks at the December meeting, a 150 basis point rate cut is anticipated before the end of the year.
However, unless there are huge surprises, the data or meeting minutes are unlikely to affect the dollar.