The US dollar index returned to the upside after Labor day’s thin liquidity and a slight decline yesterday. The US currency remained on an uptrend for more than seven weeks and could continue to extend gains as traders consider economic data in the US and other major blocs.
Today’s Eurozone PMI figures declined faster than expected while their Chinese equivalent slowed, adding to the concerns about the strength of the respective economies.
Traders could favor the dollar if economic health remains a concern.
Weak economic data in Europe could continue to weigh on the euro which has been extending losses against the USD since hitting a peak this year in July.
Traders’ attention could turn to upcoming economic data releases ahead of the approaching ECB meeting for a clearer picture, with eurozone GDP growth figures expected later this week in particular.