FRX; Dollar Soars Versus Euro Ahead Of Inflation, Manufacturing Figures
(RTTNews) - The dollar spiked higher versus other major currencies Tuesday morning in New York amid increased speculation the Federal Reserve will soon begin to implement its exit strategy from measures designed to prop up the economy.
Ahead of Wednesday's interest rate decision from the FOMC, traders will be presented with a slew of economic data, including the latest reading on producer prices and the manufacturing sector.
Lingering concerns about the debt situation in Greece have inspired some risk aversion of late, boosting the dollar versus the euro. Last week, Fitch downgraded Greece's debt on speculation it may not be able to meet its obligations.
The dollar soared to 1.4525 versus the euro, extending its move away from November's 16-month low of 1.5140.
German economic sentiment weakened slightly in December, results of a key survey showed Tuesday.
The Indicator of Economic Sentiment for Germany dropped to 50.4 in December from 51.1 in November, the Mannheim-based Centre for European Economic Research or ZEW said.
The buck also firmed up against the yen, rising to 89.50. Two weeks ago, the buck hit a 1995 low of 84.80, but has since stabilized on indications the Bank of Japan will step up its economic support measures.
Against the sterling, the dollar rose to 1.6220, approaching a 2-month high set last week.
The price of oil stayed below $70 a barrel, and the dollar held its ground near C$1.0650 versus the petro-linked loonie.
Producer price data for November is slated for release by the Labor Department at 8.30 a.m. ET. Economists expect the producer price index to have risen 0.8%, while the core index, excluding food and energy prices, to rise 0.2% for the month.
Traders will also digest results of New York Federal Reserve's empire state manufacturing survey for December, to be released at 8.30 am ET. Economists expect that the headline general business conditions index for December rose to 24 from 23.5 recorded for October.
At 9.15 a.m. ET, the Federal Reserve will release the industrial production report for November. Economists expect that industrial production rose 0.5%, while capacity utilization is expected to come in at 71.1% for the month.
