Dollar near one-week low ahead of US jobs data
LONDON (Reuters) – The dollar was stuck around a one-week low on Friday, under pressure from US employment data which should underpin hopes of a strong economic recovery from the pandemic and increase investor risk appetite.
Against a basket of major currencies, the dollar index was at 90,841, down less than 0.1% on the day at 0728 GMT. He was on track for a loss of around 0.5% over the week as a whole, having experienced his worst day in nearly two weeks on Thursday.
Payroll data in the United States is due at 12:30 p.m. GMT and is expected to show employers hired nearly a million workers in April, as they scrambled to respond to a triggered surge in demand. by reopening the economy and massive government financial assistance.
In the previous session, a larger than expected drop in jobless claims led stocks to rise and the dollar to fall, suggesting the dollar is acting as a safe haven currency, penalized by improving appetite for the risk.
But if improving economic data fuels inflation concerns and gives hope that the Federal Reserve will reduce monetary stimulus, it could boost US yields and the dollar.
Commerzbank strategist You-Na Park-Heger said the dollar could benefit from the data in the near term.
“A good result brings the target closer to the US central bank,” she wrote in a note to clients.
“However, today’s data is unlikely to have any direct meaning for the Fed, as it will still need a lot more good data for the Fed to act. As a result, the labor market report is unlikely to be at the forefront of the trend for EUR-USD. “
At 7:29 a.m. GMT, the euro was up 0.1% on the day to $ 1.207.
The British pound was a bit stronger against the dollar at $ 1.3911 and stable against the euro at 86.79 pence per euro.
The Bank of England said on Thursday the UK economy will grow the most since World War II this year and slowed the pace of its trillion dollar bond buying program, but stressed it did not reverse his raise.
Just over a third of the Scottish parliamentary election results will be announced on Friday and the rest will be announced on Saturday.
Chinese exports unexpectedly accelerated in April, and import growth peaked for a decade, helping to push up the yuan and Asian stocks.
The Chinese yuan was more than two months high against the dollar, set for its longest weekly winning streak since September, helped by strong trade data and dollar weakness.
The Australian dollar was down 0.3% against the US dollar, to 0.77645, while the New Zealand dollar was down 0.4% to 0.72125.
The Australian was supported by a strong recovery in prices for Australia’s main export producer, iron ore.
The Reserve Bank of Australia (RBA) has revised its forecast for the country’s economy upwards, although inflation and wage growth are lagging behind, a sign that monetary policy will remain very accommodative for years to come. to come up.
“We expect the likes of AUD, CAD and NOK to remain well supported against the backdrop of positive optimism about global growth that is still quite favorable,” wrote MUFG Research Director Derek. Halpenny, in a note.
The Canadian dollar fell 0.2%, after surging Thursday to its strongest in more than three years against the US dollar.
“There could be some profit taking on the current employment data in Canada, which should be bad,” said Marshall Gittler, head of investment research at BDSwiss Group, in a note.
Elsewhere, the cryptocurrency ether was flat, hitting a new all-time high on Thursday.
Bitcoin has changed little, at around $ 56,000.
Elizabeth Howcroft Report; additional reporting by Hideyuki Sano; Edited by Gareth Jones