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Dollar pauses after losses as investors seek fresh clues on U.S. economy

ForexFeb 08, 2021 12:55AM ET
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© Reuters. FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration

By Stanley White

TOKYO (Reuters) - The dollar steadied against most currencies on Monday as traders awaited more data on the U.S. economy after a disappointing jobs report last week slammed the breaks on a rally in the greenback.

The euro held gains versus the dollar but faces a test later on Monday with data that is expected to show German industrial output growth slowed at the end of last year.

Speculators have been reducing short positions in the dollar, but some analysts say better U.S. economic data and continued progress in fighting the COVID-19 pandemic will be needed for further dollar gains.

"Soft non-farm payrolls has really pulled the ladder out from under the dollar," said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities.

"Now the markets are questioning whether the dollar can rise any further. A lot depends on the coronavirus, but we also need to know when U.S. fiscal stimulus will pass."

Against the euro, the dollar traded at $1.2042 after a 0.7% slump on Friday.

The British pound bought $1.3731, close to an almost three-year high.

The dollar was quoted at 105.49 yen, having pulled back from a three-month high reached on Friday.

The U.S. economy created fewer jobs than expected in January while job losses the previous month were deeper than initially reported, data at the end of last week showed.

The release of U.S. consumer prices and consumer sentiment later this week will help determine whether a recent rise in inflation expectations and Treasury yields was justified.

Any disappointing numbers from either report could knock the dollar lower, some analysts said. Investors are also closely monitoring a U.S. debate on additional fiscal stimulus.

President Joe Biden and his Democrats are pushing ahead with $1.9 trillion COVID-19 relief package. House of Representatives Speaker Nancy Pelosi has predicted the final relief legislation could pass Congress before March 15.

The dollar index against a basket of six major currencies stood at 91.045, after falling 0.6% on Friday.

Speculators' net bearish bets on the dollar fell to $29.95 billion for the week ended Feb. 2, compared with a net short position of $33.81 billion for the previous week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data.

In the cryptocurrency market, ethereum spot prices rose 0.09% to $1,618 after the listing of ethereum futures on the Chicago Mercantile Exchange on Sunday.

Bitcoin, the most popular cryptocurrency, fell 0.42% to $38,693.

The onshore yuan edged up slightly to 6.4577 per dollar, but trade is likely to be subdued before week-long Chinese New Year holidays beginning Thursday.

Elsewhere, the Australian dollar held steady at $0.7675. Across the Tasman Sea, the New Zealand dollar edged up to $0.7200.

Dollar pauses after losses as investors seek fresh clues on U.S. economy
 

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Comments (4)
The Chad Bull
The Chad Bull Feb 07, 2021 10:27PM ET
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RIP United States Dollar
chaten dass
chaten dass Feb 07, 2021 8:58PM ET
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eur USD buy sell Tell me
chaten dass
chaten dass Feb 07, 2021 8:57PM ET
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I'm Raju from Pakistan
Bernard Tan
Bernard Tan Feb 07, 2021 8:57PM ET
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I’m from the moon
The Chad Bull
The Chad Bull Feb 07, 2021 8:57PM ET
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You guys have electricity and phones there?
Keith Lindsay
Keith Lindsay Feb 07, 2021 8:36PM ET
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So it was the jobs report and had nothing to do with another 1.9 trillion printed?
 
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