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Forex - Dollar Subdued as Loonie Leaps

Published 12/07/2018, 01:49 PM
© Reuters.
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Investing.com - The U.S. dollar was subdued against its rivals Friday as the downbeat jobs report did little to dent expectations the Federal Reserve may rein in rate hikes.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.15% to 96.62.

Nonfarm payrolls grew by 155,000 for the November, down from 237,000 in October. That missed economists' forecast of 200,000.

The jobless rate was unchanged at 3.7%, while average hourly earnings grew 0.2%, lower than expectations for 0.3% increase.

Analysts, however, continued to tout a healthy backdrop for the labor market, blaming the weaker jobs report on the recent Hurricanes, which hurt labor demand in the housing sector.

"Overall, we see little evidence that labor demand is weakening," Pantheon Macroeconomics said in a note to clients. "We think (labor) activity has been hit by the hurricanes and will rebound in the next couple of months."

Still, the greenback struggled to advance as expectations the Fed may pause on rate hikes continued to weigh. The Wall Street Journal reported Fed officials are considering whether to signal a wait-and-see attitude after a likely rate increase at their meeting in December.

EUR/USD rose 0.25% to $1.1405, while GBP/USD fell 0.42% to $1.2732.

USD/JPY rose 0.04% as safe-haven demand supported a bid in the yen, keeping a lid on gains in the pair.

USD/CAD fell 0.61% to C$1.3302 as strong jobs data from Canada drew a bid in the loonie, though gains could be limited by dwindling expectations for a Bank of Canada rate hike.

Cuts in the Canada's energy sector outlook and slowing economic data into fourth quarter "have left a January Bank of Canada hike untenable" TD Securities said. "We look for hikes in March and July 2019, and we're pushing our final hike out to January 2020."

-- Reuters contributed to this report.

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