USD – Tentative Trading Abounds In Market

The first day back from a long holiday proved cautious for the USD and broad markets. Tuesday produced gains for the Greenback versus the Single Currency, but it did lose some ground to the Sterling. Wall Street treaded water for much of the session, but at the end of the day found itself in negative territory. The ISM Manufacturing PMI was released and had a reading of 59.7, better than the estimate of 59.3. The Construction Spending numbers had a gain of 2.7%, which was significantly improved over the forecast of 0.1%. Today the Pending Home Sales numbers are on the calendar and this will give some additional insight into the housing sector which finds itself under a microscope. Tomorrow the weekly Unemployment Claims and ADP Non Farm Employment Change figures will be published. The climax for the week’s data from the State will come on Friday with the government’s Non Farm statistics. A cocktail including EUR centric nervousness and a debate regarding the true health of the American economy are the dynamics most investors are geared towards.

Tuesday’s positive data will fuel the argument about the direction of the U.S. recovery, but Friday’s jobless number will have a significant impact on the sound of the quarrel. Wall Street continues to produce lackluster results and developing stories such as the criminal investigation launched by the Federal government against oil giant BP yesterday may have spooked investors. The Sovereign Debt problem which appears that it could turn into a prolonged financial crisis has certainly not helped international investors feel any better about their risk sentiment. The economic data from the U.S. has not been all wine and roses, and road bumps have been testing the fortitude of the markets. Friday’s jobless report will play into this combustible tonic and the next two trading days leading into the vital statistics could produce further tentative returns.

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