The dollar index last month hit its highest since the start of April at 93.194 as traders positioned for a start to tapering as soon as this year
The dollar was just above a one-month low on Monday, as traders held tight positions ahead of U.S. jobs data and an Australian central bank decision.
The dollar index was down slightly from Friday, when it dipped 91.775 for the first time since June 28.
The index declined 0.88% last week, its worst performance since early May, after Federal Reserve Chair Jerome Powell reiterated mid-week that rate increases were “a ways away” and the job market still had “some ground to cover.”
Fed Governor Lael Brainard echoed those comments on Friday, saying “employment has some distance to go.”
The dollar index last month hit its highest since the start of April at 93.194 as traders positioned for a start to tapering as soon as this year.
Dollar net long positions increased to their highest level since early March of last year in the week to July 27, according to Reuters calculations and the latest data from the Commodity Futures Trading Commission.
Economists in a Reuters poll forecast a 926,000 job increase in July’s non-farm payrolls number, due Friday, which would be the biggest increase for 11 months. The U.S. unemployment rate is forecast to drop to 5.7%, from 5.9% in June.
The U.S. payrolls will be a marquee event risk, Chris Weston, head of research at broker Pepperstone, wrote in a note to clients.
If we do see the elusive 1 million jobs created, then calls for a September announcement for tapering the asset-purchases program will ramp up, buoying the dollar, whereas a print of around 703,000 or lower would push the currency lower, he said.
The dollar was little changed at 109.67 yen on Monday, and slightly weaker at $1.1873 per euro.
The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.
Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.
Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.