FOREX ASIA UPDATE - USD

The dollar was strong heading into the US session overnight and gained a further boost from better than expected data.

EURUSD traded to an initial low of 1.3219 prior to the US data, rose slightly on a soft ADP payroll estimate, and then fell again on a firm ISM, trading to a session low of 1.3146.

The ADP employment measure showed a 40k decline in private payrolls in December. Meanwhile, the manufacturing ISM index rose to 51.4 in December versus consensus of 50.0 and up from 49.5 in November, but still well below trend.

The US dollar reached its session highs ahead of the FOMC minutes, and together with yields fell slightly, on their release.

The FOMC minutes were similar to the message from the last Fed statement, with some acknowledgement of recent weakness in key data but still emphasizing inflation risks.

The yen was particularly weak overnight, while the high-yielding AUD and NZD have performed strongly, suggesting a healthy carry environment continues.

Payrolls on Friday are the main focus for the rest of this week.