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Dollar eases but U.S. jobs data supports

Published 07/08/2013, 06:23 AM
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Investing.com - The dollar eased back from recent highs against the other major currencies on Monday, but continued to be supported by expectations that the Federal Reserve will soon start to scale back stimulus following Friday’s stronger-than-expected U.S. jobs data.

During European late morning trade, the dollar pulled back from six-week highs against the yen, with USD/JPY dipping 0.04% to 101.11, off session highs of 101.53.

Demand for the dollar continued to be underpinned after official data showed that the U.S. economy added 195,000 jobs in June, more than the 165,000 increase forecast by economists.

May's figure was revised up to 195,000 from a previously reported 175,000. The unemployment rate remained unchanged at 7.6% in June.

In Japan, official data on Monday showed that the current account surplus widened to JPY540.7 billion in May, the second successive monthly increase since October 2010, adding to signs that the economy is picking up.

Meanwhile, the euro recovered from six-week lows against the dollar, with EUR/USD rising 0.19% to 1.2857.

The single currency remained under pressure after European Central Bank President Mario Draghi said last week that the bank expects to maintain interest rates at current or lower levels for an “extended” period of time.

In Germany, official data showed that industrial production fell 1% in May, compared to expectations for a 0.5% decline.

A separate report showed that Germany posted a smaller-than-expected trade surplus of EUR14.1 billion in May, as exports decreased by 4.8% on a year-over-year basis and imports fell by 2.6%.

Analysts had expected a trade surplus of EUR17.5 billion.

The dollar pulled back from four-month highs against the pound, with GBP/USD edging up 0.12% to 1.4910.

The pound remained under pressure after falling more than 1% against the dollar on Thursday after the Bank of England indicated that interest rates are likely to remain at record low levels, given weakness in the U.K.’s economic recovery.

The dollar edged lower against the Swiss franc, with USD/CHF inching down 0.03% to 0.9633.

The greenback slipped lower against its Australian, New Zealand and Canadian counterparts, with AUD/USD climbing 0.36% to 0.9091, NZD/USD up 0.56% to 0.7749 and USD/CAD slipping 0.12% to 1.0559.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.14% to 84.57.

The eurogroup of euro zone finance ministers were to hold talks in Brussels later Monday, while ECB President Mario Draghi was to testify before the committee on Economic and Monetary Affairs in the European Parliament.




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