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US Dollar Edges Lower on Light Trade

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US Dollar Edges Lower on Light Trade

The US dollar edged lower in the Asian and European markets, as thin trading kept the American currency on ice on Martin Luther King Jr. Day.

The US markets were closed Monday, as investors paused to remember assassinated civil rights leader Martin Luther King Jr. The holiday kept dollar trading minimal for most of the day. The US dollar index (DXY), a broad gauge of US dollar activity, fell nearly 0.2 percent to 81.07.

The greenback suffered mild setbacks virtually across the board. The euro edged up 33 pips to 1.3566 US, and the British pound extended its winning ways by posting a gain of 21 pips. Sterling received an unexpected boost Friday after UK retail sales reached a nine-year high last month.

Several rounds of influential European data will make headlines this week, beginning Tuesday with the ZEW Economic Sentiment Index. Markit Group will report on manufacturing and service activity in Germany and the Eurozone Wednesday, followed by a consumer confidence report courtesy of the European Commission.

In the UK, the Bank of England meeting minutes will headline the major releases Tuesday. The minutes will be followed by official employment data from the Office for National Statistics. UK unemployment fell by 35,000 last month, according to forecasts, while the unemployment rate eased to 7.3 percent. Investors are closely monitoring UK joblessness to determine how quickly the indicator will reach the BOE’s target threshold of 7 percent. With inflation falling to 2 percent last month, the BOE will likely have the breathing room it needs to maintain record low interest rates.

The US newswire will remain relatively quiet until Thursday, when Markit Group is scheduled to produce US manufacturing PMI. The Chicago Fed National Activity Index and existing home sales, courtesy of the National Association of Realtors, round out the dollar’s busiest day of the week.

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