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

U.S. dollar posts best month since November 2016; nonfarm payrolls loom

EconomyJun 30, 2021 03:57PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: An employee of the Korea Exchange Bank counts one hundred U.S. dollar notes during a photo opportunity at the bank's headquarters in Seoul April 28, 2010. REUTERS/Jo Yong-Hak/File Photo

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - The dollar rose to a 2-1/2-month peak on Wednesday, posting its biggest monthly rise since November 2016, supported by a surprisingly hawkish shift in the U.S. Federal Reserve's rate outlook and concern over the spread of the Delta coronavirus variant.

The dollar has gained about 3% against a basket of currencies this month, partly in the wake of the Fed's stance at a meeting early this month. Traders are looking to Friday's U.S. nonfarm payrolls report for confirmation of a shift in monetary policy.

The greenback also extended gains after data showed U.S. private payrolls increased more than expected in June by 692,000 jobs. Data for May was revised lower to show 886,000 jobs added instead of the initially reported 978,000. Economists polled by Reuters had forecast private payrolls would increase by 600,000.

Action Economics said the dollar has been mainly supported by the better-than-expected U.S. private payrolls data, "which has driven dollar short covering," ahead of the employment report.

The research firm also cited firmer short-term U.S. Treasury 2-year yields, up nearly 11 basis points in June, the largest increase since September 2019, as investors priced in some tightening in 2023.

"This should continue to help the U.S. dollar going forward, as expectations are for the Fed to begin tightening first," Action Economics said in its blog. "In addition, U.S. economic growth is likely to handily exceed that of Europe."

On Friday, the U.S. Labor Department is expected to report a gain of 700,000 jobs in June, compared with 559,000 in May, and an unemployment rate of 5.7% versus 5.8% in the previous month, according to a Reuters poll of economists.

"If we see the U.S. employment number come out stronger than expected, then this reinforces the narrative that the Fed may remove accommodation faster than previously expected," said Erik Nelson, macro strategist at Wells Fargo (NYSE:WFC) Securities in New York. "That's going to be dollar-positive."

Investors were also apprehensive about the spread of the Delta variant that has prompted some countries such as Australia, the UK, and parts of Europe to undertake or plan renewed lockdowns, causing their currencies to struggle. That has put a bid on the U.S. dollar.

In afternoon trading, the dollar index, which measures the greenback against a basket of six major currencies, rose 0.4% % to 92.441 after earlier touching 92.451, its highest since early April.

The euro was down 0.4% against the dollar at $1.1849. Earlier, the euro dropped to a 4-1/2-month low of $1.1845. Against the yen, the dollar was 0.5% firmer at 111.09 yen. It rose to 111.12, the highest since late March last year.

Risk-sensitive and commodity-exposed currencies such as the Australian and New Zealand dollars nursed losses against the greenback. The Aussie and New Zealand dollars were down 0.2% and 0.1% at US$0.7496 and US$0.6983 respectively.

U.S. dollar posts best month since November 2016; nonfarm payrolls loom
 

Related Articles

Pound falls as UK inflation hits 40-year high
Pound falls as UK inflation hits 40-year high By Reuters - May 18, 2022 2

By Lucy Raitano LONDON (Reuters) -Britain's pound fell against the dollar on Wednesday, pulling away from almost two-week highs after data showing British inflation rising to a...

Dollar rebounds as risk appetite fades
Dollar rebounds as risk appetite fades By Reuters - May 18, 2022

By Saqib Iqbal Ahmed NEW YORK (Reuters) - The U.S. dollar edged higher on Wednesday, on pace to snap a three-session losing streak, as concerns about the outlook for global...

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.
Comments (5)
Vlad Lozovskiy
Vlad Lozovskiy Jun 30, 2021 9:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Little blip, and they trying to tell us how strong the dollar is. However when you look at prices you see a different picture.
Joel Schwartz
Joel Schwartz Jun 30, 2021 8:52AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
As long as US Debt > GDP, the dollar will be strong. People need to sevice that debt still, and mind you, we’re still in a temporary phase of artificially surpressed intetest rates. Only direction for the USD is up.
Jouni Matero
Jouni Jun 30, 2021 8:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Best month for dollar perhaps, however dollar real value is dropping. 4T funnymoney floating around does good for dollar valuation world wide lol.
Michael Dell
Michael Dell Jun 30, 2021 12:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fed is the richest entity in america not any individual or corporations…Because remember they have the magic keys or printer which takes them few seconds to make dollars out of thin air the same dollars which masses and companies works to get their hands on
CHADWICK RICHINGTON
CHADWICK RICHINGTON Jun 29, 2021 9:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Buy physical gold before the financial collapse
Matt Brackley
Matt Brackley Jun 29, 2021 9:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
just wait...the sheep bought ath. there will be a nice entry when the fire blazes
 
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