Investing.com - The dollar moved up from earlier losses against most major currencies on Wednesday as investors looked past a soft September jobs report that fanned prospects for the Federal Reserve to continue stimulating the economy with monthly asset purchases.
Concerns China will tighten monetary policy boosted demand for the greenback somewhat.
In U.S. trading on Wednesday, EUR/USD was flat at 1.3780.
The dollar came under selling pressure after the Department of Labor revealed on Tuesday that U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.
The previous month’s figure was revised up to a gain of 193,000 from a previously reported increase of 169,000.
July's figure was revised down to 89,000 from 104,000.
The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August due in part to more people dropping out of the labor force.
The data kept expectations going strong that the Federal Reserve will continue stimulating the economy to boost job creation by buying assets each month, possibly well into 2014.
The Fed is currently purchasing USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery and job creation, weakening the dollar in the process.
Expectations that China’s central bank will tighten monetary policy to help control inflation in the world’s second-largest economy sent some investors chasing safe-haven dollar positions and helped reverse the dollar's earlier losses.
Elsewhere, investors sold euro positions for profits after the European Central Bank announced plans to submit banks to new stress tests next year.
The review is to run over the course of a year and conclude before the ECB assumes its supervisory role over the bloc’s banking sector at the end of 2014. The news sparked concerns over a revival of the crisis in the euro zone.
The greenback was up against the pound, with GBP/USD down 0.41% at 1.6170.
The dollar was down against the yen, with USD/JPY down 0.84% at 97.32, and down against the Swiss franc, with USD/CHF down 0.32% at 0.8919.
The yen saw particularly robust demand on rising Chinese money-market rates, a sign the financial sector may be anticipating China's central bank to tighten policy.
The dollar was up against its cousins in Canada, Australia and New Zealand due to concerns of Chinese policy tightening, with USD/CAD up 0.94% at 1.0386, AUD/USD down 0.87% at 0.9626 and NZD/USD trading down 1.40% at 0.8396.
Elsewhere, the Canadian dollar dropped after the Bank of Canada dropped language referring to the need for future rate increases from its monetary policy statement and revised down its growth forecast for this year.
The BoC left interest rates on hold at 1% in a widely expected decision.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.04% at 79.32.
Concerns China will tighten monetary policy boosted demand for the greenback somewhat.
In U.S. trading on Wednesday, EUR/USD was flat at 1.3780.
The dollar came under selling pressure after the Department of Labor revealed on Tuesday that U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.
The previous month’s figure was revised up to a gain of 193,000 from a previously reported increase of 169,000.
July's figure was revised down to 89,000 from 104,000.
The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August due in part to more people dropping out of the labor force.
The data kept expectations going strong that the Federal Reserve will continue stimulating the economy to boost job creation by buying assets each month, possibly well into 2014.
The Fed is currently purchasing USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery and job creation, weakening the dollar in the process.
Expectations that China’s central bank will tighten monetary policy to help control inflation in the world’s second-largest economy sent some investors chasing safe-haven dollar positions and helped reverse the dollar's earlier losses.
Elsewhere, investors sold euro positions for profits after the European Central Bank announced plans to submit banks to new stress tests next year.
The review is to run over the course of a year and conclude before the ECB assumes its supervisory role over the bloc’s banking sector at the end of 2014. The news sparked concerns over a revival of the crisis in the euro zone.
The greenback was up against the pound, with GBP/USD down 0.41% at 1.6170.
The dollar was down against the yen, with USD/JPY down 0.84% at 97.32, and down against the Swiss franc, with USD/CHF down 0.32% at 0.8919.
The yen saw particularly robust demand on rising Chinese money-market rates, a sign the financial sector may be anticipating China's central bank to tighten policy.
The dollar was up against its cousins in Canada, Australia and New Zealand due to concerns of Chinese policy tightening, with USD/CAD up 0.94% at 1.0386, AUD/USD down 0.87% at 0.9626 and NZD/USD trading down 1.40% at 0.8396.
Elsewhere, the Canadian dollar dropped after the Bank of Canada dropped language referring to the need for future rate increases from its monetary policy statement and revised down its growth forecast for this year.
The BoC left interest rates on hold at 1% in a widely expected decision.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.04% at 79.32.