Dollar pares intra-day gains in New York session on profit taking: Jan 4, 2017

Market Review - 03/01/2017  22:25GMT  

Dollar pares intra-day gains in New York session on profit taking

The greenback rallied across the board and hit multi-month highs due to the release of upbeat U.S. manufacturing data as traders resumed trading after the New Year break, however, dollar quickly retreated vs its major peers in New York morning on broad-based profit taking.  
  
The Institute for Supply Management (ISM) said its index of manufacturing activity rose to 54.7 last month from November's reading of 53.2. Analysts had forecast a smaller increase to 53.6.  
  
Versus the Japanese yen, dollar found renewed buying at 117.22 ahead of Asian open and rose in European morning on the buck's broad-based strength, hitting 118.35 ahead of New York open. Later, the greenback rose to session high of 118.61 in New York on the back of upbeat U.S. data before retreating strongly to as low as 117.23, just above Tuesday's 117.22 low made in early Australian trading.  
  
Despite an initial recovery to 1.0490 in Asia, the single currency pared its gains and tumbled to 1.0375 ahead of New York open on dollar's broad-based strength. Euro continued to remain under pressure and dropped further to a fresh 13-year trough at 1.0341 in New York morning on the back of upbeat U.S. data. Later, price pared its losses and staged a short-covering rally to as high as 1.0433 in New York morning before moving sideways in New York afternoon session.  
  
Although the British pound edged up to 1.2307 in Asian session, price pared its gains and retreated to 1.2248 in European morning before staging a rebound to 1.2303 in Europe on strong UK manufacturing data. However, cable met renewed selling and tumbled to a fresh 2-month trough at 1.2199 in New York morning on dollar's broad-based strength before rebounding strongly in tandem with euro to 1.2274.  
  
In a report, market research group Markit said that its U.K. manufacturing PMI jumped to a seasonally adjusted 56.1 last month from a reading of 53.6 in November, that was revised from an initial 53.4. Analysts had expected the index to slip to 53.3 in December.  
  
Data to be released on Wednesday:  
  
Japan manufacturing PMI, France consumer confidence, services PMI, Italy services PMI, Germany services PMI, EU services PMI, inflation, UK mortgage approvals, construction PMI and U.S. ADP employment.