Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Dollar Edges Lower; April Payrolls Data in Focus

ForexMay 07, 2021 02:54AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Peter Nurse - The dollar edged lower in early European trade Friday, under modest pressure ahead of the monthly U.S. employment report which is expected to firm up expectations of a strong economic recovery.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 90.905, near its lowest level this week. 

EUR/USD traded largely flat at 1.2060, having gained 0.5% Thursday, USD/JPY rose 0.1% to 109.16, the risk-sensitive AUD/USD fell 0.2% to 0.7766, while USD/CAD rose 0.2% to 1.2176, having fallen to a 3-1/2-year low of 1.2145 overnight, helped by the Bank of Canada's recent tapering of its asset purchases and its shift to more hawkish guidance. 

The greenback has traded in narrow ranges Friday, with traders focusing on the release of U.S. payrolls data, at 1230 GMT, which are expected to confirm the U.S. labor market is on a solid path towards recovery from the pandemic.

Economists polled by earlier in the week expected, on average, 978,000 new U.S. jobs in April, after gains of 916,000 in March.

That said, expectations are likely even more elevated now after data on Thursday showed the number of Americans filing new claims for unemployment benefits fell below 500,000 last week for the first time since the Covid-19 pandemic began.

“The recent declines in jobless claims – as well as many surveys (NFIB's job openings at a record high) – suggest that payrolls growth is accelerating. We would thus lean towards positive surprises in coming months,” said analysts at Nordea, in a note.

While strong economic data could lead to more risk taking as traders’ confidence grows, it could also lead to higher Treasury yields, helping the dollar, as the market anticipates the Federal Reserve tightening its monetary policies sooner than previously expected.

However, for now, most traders seem to be prepared to take the Federal Reserve at its word that stimulus tapering will not be on the agenda any time soon.

Elsewhere, GBP/USD rose 0.1% to 1.3902, with sterling struggling to post any serious gains despite the Bank of England slowing the pace of its bond-purchasing program at its meeting Thursday.

Political uncertainty is capping any sterling gains as the Scots go to the polls, potentially triggering a battle between the Scottish National Party and British Prime Minister Boris Johnson over another independence vote.

That said, “regardless of the result, most don't expect an imminent vote on independence. Given a second referendum (if one happens) is probably years away, there's limited need for such a risk premia to be priced into sterling,” said analysts at ING, in a note.

Also, USD/CNY rose 0.1% to 6.4623, just above a two-month low, after China’s trade data for April came in better than expected, with exports growing 32.3% year-on-year and imports growing 43.1% year-on-year.


Dollar Edges Lower; April Payrolls Data in Focus

Related Articles

Fed-fueled dollar rises as bears make for exits
Fed-fueled dollar rises as bears make for exits By Reuters - Jun 18, 2021 8

By Saqib Iqbal Ahmed and Julien Ponthus NEW YORK (Reuters) - The dollar extended its advance against a basket of currencies on Friday, building on the gains logged after the U.S....

Trust Dollar Rally for Now, But Bears Will Be Back
Trust Dollar Rally for Now, But Bears Will Be Back By - Jun 18, 2021 2

By Yasin Ebrahim – The dollar's sunny days are set to continue for quite a while, but the Fed's path will eventually turn murky again to bring the bears out of...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with 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
  • 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.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. 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’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
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?
Replace the attached chart with a new chart ?
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'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
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email