Dollar ends higher on short-covering

Market Review - 03/08/2020  23:52 GMT  

Dollar ends higher on short-covering

The greenback extended its winning streak and ended Monday higher across the board on short-covering and later pared intra-day gains in New York due partly to downbeat U.S. construction spending data.  
  
Reuters reported the Commerce Department said on Monday that construction spending dropped 0.7% to $1.355 trillion, the lowest level since June 2019. Data for May was revised to show construction outlays falling 1.7% instead of decreasing 2.1% as previously reported.    Economists polled by Reuters had forecast construction spending would rebound 1.0% in June. Construction spending edged up 0.1% on a year-on-year basis.   
  
Versus the Japanese yen, dollar went through a volatile session. Although price jumped to 106.43 at Asian open, price met renewed selling and fell to session lows at 105.59 in Europe on cross-buying in jpy. However, the pair then erased intra-day losses and rallied to a 1-week high at 106.47 in New York morning on usd's broad-based strength before retreating again to 105.92 on profit-taking.  
  
The single currency met renewed selling at 1.1796 in New Zealand and fell to 1.1742 at Asian open. Despite recovering to 1.1784 in European morning, the pair then dropped to session lows of 1.1697 in New York morning on usd's strength before rebounding strongly to 1.1767 on short-covering and then traded sideways.  
  
Reuters reported IHS Markit's final Manufacturing Purchasing Managers' Index bounced to 51.8 in July from June's 47.4 - its first time above the 50 mark that separates growth from contraction since January 2019. An initial "flash" release had it at 51.1.   
  
The British pound went through a hectic session. Although cable fell in tandem with euro from 1.3106 to 1.3057 at Asian open, price staged a strong rebound to 1.3113 in European morning but only to fall again to session lows of 1.3005 in New York morning on usd's broad-based strength before recovering to 1.3078 on short-covering and cross-buying in sterling.  
  
Reuters reported the IHS Markit/CIPS manufacturing Purchasing Managers' Index (PMI) rose to 53.3 in July from June's 50.1, broadly in line with an earlier flash estimate of 53.6 and the highest since March 2019.   
  
Data to be released on Tuesday :  
  
Japan Tokyo core CPI, CPI, Australia trade balance, imports, exports, retail sales, retail trade, RBA interest rate decision, Swiss consumer confidence, France budget balance, EU producer prices, U.S. redbook, durables ex-defense, durable goods, factory orders, durables ex-transportation, Canada Markit manufacturing PMI, and New Zealand GDT price index.  

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