US Dollar Continues to Demonstrate Strength Ahead of Fed Announcement

The US dollar continued to demonstrate strength today, gaining for nine times in 11 days against the euro. Trading was thinner than usual during the current trading session as markets in many countries were closed for the May Labor Day.
Macroeconomic data released in the United States on Tuesday was rather mixed. In particular, the manufacturing Purchasing Managers Index reported by the Institute of Supply Management fell in April to the lowest level since July 2017.
The dollar remained broadly supported by the outlook for interest rate hikes from the Federal Reserve. While no change to policy is expected tomorrow, traders hope to see if the policy statement will speak about possibility of more hikes in 2018. Additionally, market participants anticipate that nonfarm payrolls will show robust growth by 189,000 on Friday, suggesting that the US economy remains in a healthy state.
In other news, exemptions from tariffs on steel and aluminum imports for the European Union, Canada, and Mexico, which should have expired today, were extended till June 1. US Treasury Secretary Steven Mnuchin will visit China this week for trade talks.
EUR/USD dropped from 1.2078 to 1.1996 as of 18:23 GMT today. GBP/USD declined from 1.3762 to 1.3614. Both currency pairs were trading near the lowest level since January 12. USD/JPY rallied from 109.32 to 109.75.

If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.