US dollar is gaining against its major counterparts today, heading higher ahead of data releases. Greenback is higher today, and the US dollar index is gaining ground.
Many expect that economic data will show that the US economy continues to strengthen. Even though the dollar lost some ground toward the end of last week, with disappointing jobs data pulling the greenback lower, this week there is a little more optimism. There are expectations for PMI data to come in strong.
A strengthening US economy increases speculation that the Federal Reserve will have to accelerate its timetable for tightening monetary policy. The Fed is already in the process of stepping down its monthly asset purchases. The next step that Forex traders and others are watching for is an increase in interest rates.
If economic data comes in relatively strong today, that will provide more support for the US dollar against its major counterparts.
At 13:42 GMT the US dollar index is higher, moving up to 81.4950 from the open at 81.3140. EUR/USD is lower, falling to 1.3381 from the open at 1.3422. This represents another psychological victory for the greenback over the euro. GBP/USD is also lower, falling to 1.6861 from the open at 1.6863. USD/JPY is heading higher, up to 102.7105 from the open at 102.5670.
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