The Dollar Continues to Strengthen ahead of the Release of Earnings Reports and U.S. Economic Data

The U.S. dollar is rising against all G-10 currencies as traders position themselves ahead of key earnings reports from two major global corporations, while investors are also monitoring upcoming U.S. economic data.

The Bloomberg Dollar Spot Index is up 0.2%, reaching its highest level since November 7, with options market sentiment remaining largely unchanged, according to risk-reversal movements.

Trading volumes are below average during the Asian session but pick up ahead of the London–New York overlap, according to European traders. The market is anticipating Wednesday’s results from Nvidia and Walmart, seen as key indicators of the AI boom and the resilience of the U.S. consumer, respectively.

Traders are also watching for the release of the minutes from the latest Federal Reserve meeting.

GBP/USD is heading for a fourth consecutive decline, down 0.2% to 1.3118, after data showed U.K. inflation fell for the first time in seven months in October.

The move in the pound is limited despite the inflation headlines, although futures markets are increasing bets on upcoming interest rate cuts from the Bank of England. This is another sign that fiscal risks are outweighing monetary policy influence on the pound.

USD/JPY continues its recent gains, rising 0.3% to 155.95 – the highest level since late January.

The Governor of the Bank of Japan, Kazuo Ueda, is scheduled to meet with key cabinet ministers to discuss the joint agreement between the government and the central bank.

A member of a key panel advising Japanese Prime Minister Sanae Takaichi said the central bank is unlikely to raise the policy rate before March.

EUR/USD is down 0.1% to 1.1574; traders note stops are positioned below 1.1550 and 1.1520.

NZD/USD falls 0.5% to 0.5628, with the “kiwi” selling off against the Australian dollar, triggering stop-loss sales below 0.5635 – the November 13 low, according to an Asian forex market trader.

Some of the data come from FX traders familiar with transactions who remain anonymous because they are not authorized to speak publicly.

Source: Bloomberg Terminal