Dollar index cautiously holding steady ahead of FOMC

The dollar index is seen steadying on Tuesday morning in Asia following a decline in the previous session. Crucial data for the day and week is likely to guide direction for greenback. US November retail sales due later today and Federal Reserve FOMC decision, Bank of Japan (BoJ), and the Bank of England (BoE) interest rate decision this week are keeping sentiment in the currency cautious. Currently, the dollar index that measures the greenback against a basket of currencies is quoting at 106.63, up marginally on the day and US benchmark 10 year yields at 4.40%. Meanwhile, data yesterday showed S&P Global US Composite PMI, which takes both the services and the manufacturing business activity into account, came in at 56.6 in December's flash estimate from 54.9. This figure registered the highest level in 33 months. Additionally, the Services PMI improved to 58.5 in December from 56.1 in November, above the market consensus of 55.7. On a negative note, the Manufacturing PMI declined to 48.3 in December versus 49.7 prior, weaker than the 49.4 expected. Among basket currencies, EURUSD and GBPUSD are both slightly lower at $1.059 and $1.2671respectively.

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