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Forex - Dollar posts cautious gains ahead of September jobs report

Published 10/21/2013, 03:34 PM
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Investing.com - The dollar posted cautious gains against most major currencies on Monday as investors remained camped out in safe-haven greenback positions ahead of the release of the long-awaited September jobs report on Tuesday.

In U.S. trading on Monday, EUR/USD was down 0.06% at 1.3677.

A U.S. government shutdown that began Oct. 1 and ended last week left the dollar without one of its chief steering currents, the monthly U.S. nonfarm payroll report.

September's unemployment data will hopefully give investors fresh insight into the direction of U.S. monetary policy and move the dollar.

The Fed is currently buying 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, weakening the dollar in the process.

The government shutdown and accompanying default fears along with the naming of dovish Janet Yellen as the new Chair of the Federal Reserve left may investors second-guessing when the U.S. central bank will announce plans to taper its quantitative easing program, which could push the dollar up in the long term.

Investors hope the September jobs data, originally due out Oct. 4, will provide a fresh weather vane for the dollar.

Elsewhere, lackluster data out of the U.S. housing sector capped the dollar's gains.

The National Association of Realtors reported earlier that total existing home sales declined 1.9% to a seasonally adjusted annual rate of 5.29 million units in September from a downwardly revised 5.39 million in August, mainly due to home prices outpacing income growth.
Analysts were expecting to see 5.30 million units sold.

The greenback was up against the pound, with GBP/USD down 0.13% at 1.6145.

The dollar was up against the yen, with USD/JPY up 0.43% at 98.21, and up against the Swiss franc, with USD/CHF up 0.02% at 0.9021.

In Japan earlier, the yen came under pressure after Bank of Japan Governor Haruhiko Kuroda reiterated Monday that the bank would stick to its stimulus program and added that the economy was on track to reach the bank's 2% inflation target.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.07% at 1.0299, AUD/USD down 0.21% at 0.9656 and NZD/USD trading down 0.58% at 0.8458.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.08% at 79.76.

On Tuesday, expect the pair to trade on the U.S. jobs report.










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