The dollar index partly gave up yesterdays sharp up move after US President Donald Trump confirmed he has reached an agreement with Mexican President Claudia Sheinbaum to pause recently implemented tariffs on Mexico for one month. During the weekend, Trump threatened 25-percent tariffs on neighboring Mexico and Canada -- despite sharing a free trade pact -- and hit China with a 10-percent tariff in addition to already enacted levies that sent dollar index back to hovering around its recent 2 year peaks. Currently, DXY, which measures the greenback against a basket of currencies, is quoting at 108.77, down 0.10% on the day. On the US data front, the ISM manufacturing PMI for January climbed to 50.9 from 49.3, exceeding market expectations of 49.8. The employment Index improved to 50.3 from 45.4, indicating stronger labor market conditions in the manufacturing sector. Investor now shift focus to Fridays nonfarm payrolls report, which is expected to provide more clarity on the state of the labor market.
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