Saturday, April 1, 2023

Dollar Down, Investors Look to U.S. Jobs Data By


© Reuters.

By Gina Lee – The dollar was down on Wednesday morning in Asia but clung onto its recent gains. Investors digested the of COVID-19’s more virulent Delta strain while awaiting U.S. jobs data crucial to the direction of the U.S. Federal Reserve’s monetary policy.

The that tracks the greenback against a basket of other currencies inched down 0.01% to 92.030 by 12:18 AM ET (4:18 AM GMT). It rose 0.2% to hit a one-week high during the previous session.

The pair inched down 0.02% to 110.48. Data released earlier in the day in Japan said fell by a worse-than-expected 5.9% month-on-month in May.

The pair edged up 0.19% to 0.7525 and the pair edged up 0.18% to 0.7002.

The pair inched down 0.10% to 6.4572. Chinese data released earlier in the day said that the was a better-than-expected 50.9 for June, while the was 53.5, lower than May’s reading of 55.2.

The pair edged up 0.13% to 1.3853.

“There’s a bit of a bearish tilt to currencies… it’s the line you would expect on a risk-off day, and maybe it’s a bit of insurance ahead of non-farm payrolls,” Westpac analyst Sean Callow told Reuters, referring to the U.S. jobs report due on Friday.

The dollar remained near the middle of the range it has found after the Fed’s hawkish tone in its latest , handed down earlier in the month, spooked markets.

The spread of the virulent Delta strain of the COVID-19 virus in several countries has also decreased investors’ risk appetite. Rising numbers of cases involving the strain in Australia have already led to renewed lockdown measures in four cities and the spike in numbers also poses a threat to the global economic recovery from COVID-19.

Also on the data side, investors await the U.S. jobs report for June, including , due on Friday. The will also be released later in the day, ahead of the report.

A strengthening labor market could prompt the Fed to taper assets and hike interest rates earlier than expected, giving the dollar a boost. However, weaker-than-expected data will leave the greenback in a vulnerable position.

“It’s unusually hard to forecast and so the risk of a surprise is enormous… super strong could really reinforce the reaction to the (Fed) and very weak could really push back on those who bought dollars post-Fed,” said Westpac’s Callow.

Other investors sought to take a wider view of the U.S. labor market data.

“It’s not just about non-farm payrolls, but about the whole labor market,” with hourly earnings and the unemployment rate also likely to be closely watched, National Australia Bank (OTC:) senior FX strategist Rodrigo Catril told Reuters.

“There’s also a wide dispersion in terms of estimates which suggests that either way there will be a few disappointed with a soft number as well as a really strong number,” Catril added.

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