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Forex - Dollar softens as investors sell greenback for profits

Published 07/08/2013, 03:50 PM
Updated 07/08/2013, 03:51 PM
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Investing.com - The dollar moved lower against most major currencies on Monday after investors sold the greenback for profits, locking in gains after data released Friday revealed more hiring took place in June than expected.

In U.S. trading on Monday, EUR/USD was up 0.35% at 1.2878.

The Bureau of Labor Statistics reported Friday the U.S. economy added 195,000 nonfarm payrolls in June, well above analysts' calls for a 165,000 increase.

May's figure was revised upwards to 195,000 jobs from 175,000, while April's figure was revised upwards to 199,000 from 149,000.

The headline unemployment rate remained unchanged at 7.6% last month, while hourly earnings rose 0.4% compared to market calls for a 0.2% gain.

The data refueled expectations that the Federal Reserve will begin to taper its stimulus programs in the coming months.

Stimulus programs like the Fed's monthly USD80 billion asset-purchasing program weaken the dollar by flooding the economy with liquidity to push down borrowing costs, and talk of their dismantling can strengthen the greenback, often considerably, and by Monday, investors felt the U.S. currency's gains were due for a breather.

Elsewhere, investors avoided the safe-haven dollar position to take on risk in U.S. stock markets on sentiments that an end to stimulus will herald the arrival of more sustained economic growth and stocks rising on more on fundamentals and less on monetary support.

The greenback was down against the pound, with GBP/USD trading up 0.39% at 1.4952.

The dollar was down against the yen, with USD/JPY down 0.20% at 100.97, and down against the Swiss franc, with USD/CHF trading down 0.05% at 0.9632.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.12% at 1.0560, AUD/USD up 0.76% at 0.9128 and NZD/USD trading up 1.25% at 0.7804.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.32% at 84.42.

Investors will keep an eye out for Chinese inflation data due out Tuesday, as any surprises could reflect in currency markets.









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