The dollar inches up ahead of US data

By @ibtimes on

The dollar ticked up on Monday trading ahead of the release of US personal spending and pending home sales data.

Personal spending will grow to 0.5% in February from 0.2%, while pending home sales for the same month will advance 0.4% compared with the 2.8% drop recorded in January, according to median estimates.

Last week's data and some comments by Fed officials referred to the possibility of the roll back of the second-round stimulus as US annualized 4q GDP beat forecasts of 2.8% when it reached 3.1% and unemployment unexpectedly dropped to 8.9% in February.

The pace of progress may give some ground to the dollar that will complete four consecutive months of losses versus the euro by the end of March.

The dollar index, which tracks the dollar movements vis-à-vis a basket of major currencies, rose to a high of 76.42 compared with the day's opening level of 76.29.

Moreover, the euro showed some weakness on expectations Merkel will not be able to vote for financial aids to debt-laden nations in the euro area after her party lost a key state election.

Still, the general sentiment in the euro zone is worrying after last week's events which witnessed the rejection of austerity measures by Portuguese opposition which led to the resignation of the Prime Minister and increased the likelihood that Portugal will accept an international rescue.

Concerning the euro-dollar pair, it is currently trading near the day's opening around 1.4050, where 1.40 remains a key level.

So far, the pair has recorded a high of 1.4084 and a low of 1.4019, while the trading range for this week is among the key support at 1.3860 and the key resistance at 1.4365.

Moving to the British pound versus the dollar, it continued its drop for the fifth day amid the absence of data from the UK, where the situation remains concerning, according to the latest data released, especially as George Osborne lowered growth forecasts for 2011 and 2012 in his budget report last week.

The pair is currently trading at 1.5975 after it slipped to touch a low of 1.5934 and after reaching a high of 1.6021, where the trading range for this week is among the key support at 1.5770 and the key resistance at 1.6450.

With regard to the dollar-yen pair, it is showing incline on daily charts to trade at 81.70, after recording a high of 81.84 and a low of 81.37.

The trading range for this week is among the key support at 79.00 and the key resistance at 83.25.

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