Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar edges higher with Friday's payrolls data in focus

Economy Oct 05, 2021 03:40PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A U.S. dollar banknote is seen in this illustration taken May 26, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

By Saqib Iqbal Ahmed

NEW YORK (Reuters) -The U.S. dollar edged higher on Tuesday, lingering close to the one-year high hit last week, as traders remained circumspect ahead of key payrolls report at the end of the week that could provide clues to the U.S. Federal Reserve's next move.

Moves in the FX market were likely to remain largely muted for the rest of the week as investors await the update on the U.S. labor market that could help provide clues to whether the Fed will begin tapering its asset purchases before year's end, analysts said.

"Nonfarm payrolls is always a market mover," said John Doyle, vice president of dealing and trading at FX payments firm Tempus Inc.

"An underwhelming print will give the Fed dovish cover, but a blowout reading, paired with rising inflation made worse by the energy crisis will put more pressure on the Fed to begin tapering and help the greenback," said Doyle.

Friday's non-farm payrolls data is expected to show continued improvement in the labor market, with a forecast for 488,000 jobs to have been added in September, a Reuters poll showed.

The U.S. dollar index, which measures the currency against six rivals, was 0.2% higher at 93.981, moving back towards Thursday's peak of 94.504, its highest since late September 2020.

"Generally, the U.S. dollar is trying to find new ranges after a strong rally at the end of September. In my opinion, the greenback's rally was overdone and we have seen that unwind over the past three to four days," Doyle said.

Others, however, expected the greenback to resume its upward move.

With the Fed likely to soon begin scaling back asset purchases, "conditions are ripe for continued USD strength once the current, likely consolidative, correction in the dollar passes," Shaun Osborne, chief currency strategist at Scotiabank, said in a note.

Worries about the debt ceiling are beginning to rattle investors as the deadline nears for Congress to raise the U.S. borrowing limit to avoid a historic default on U.S. debt.

The risk-sensitive Australian dollar was little changed on the day after the Reserve Bank of Australia reiterated that it does not expect to raise interest rates until 2024.

Sterling rose to a near three-week high against the euro, recovering from a sharp sell-off last week as traders turn their attention back to the prospect of interest rate rises in Britain.

Cryptocurrencies rallied, a day after data from digital asset manager CoinShares showed cryptocurrency investment products and funds recorded inflows for a seventh straight week, as institutional investors warmed to more supportive statements from regulators.

Bitcoin, the world's biggest cryptocurrency by market value, hit $50,000 for the first time since Sept. 7.

Dollar edges higher with Friday's payrolls data in focus
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email