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Forex - Dollar index slips lower as markets digest NFP data

ForexAug 07, 2017 05:23AM ET
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© Reuters. Dollar loses ground vs. rivals after reaching 1-week peak

Investing.com - The dollar slipped lower against the other major currencies on Monday, pulling back from Friday’s one-week highs reached after the release of far better-than-expected U.S. nonfarm payrolls data.

The dollar strengthed broadly after the U.S. Labor Department on Friday said the economy added 209,000 jobs last month, blowing past expectations for an increase of 183,000.

The unemployment rate ticked down to 4.3% in July from 4.4% the previous month, in line with expectations.

The report also showed that average hourly earnings increased by 0.3% last month, in line with forecasts and after a 0.2% gain in June.

The strong data fueled expectations the Federal Reserve will stick to its plans for a third interest rate hike this year.

The greenback had been pressured lower by a combination of worries over political turmoil in Washington and recent lackluster economic reports, which raised doubts over whether the Fed would be able to stick to its planned tightening path.

Investors were now looking ahead to U.S. inflation reports later in the week for indications of whether the recovery in the dollar is sustainable in the longer term.

EUR/USD rose 0.24% to 1.1800.

Elsewhere, GBP/USD held steady at 1.3046, still close to Friday’s one-and-a-half week trough of 1.3021.

USD/JPY edged up 0.12% to 110.82, while USD/CHF was little changed at 0.9624.

The Australian and New Zealand dollars were weaker, with AUD/USD down 0.15% at 0.7917 and with NZD/USD declining 0.61% to 0.7365.

Earlier Monday, the Reserve Bank of New Zealand said its inflation expectations ticked down to 2.1% in the second quarter from 2.2% in the three months to March.

Meanwhile, USD/CAD gained 0.21% to trade at 1.2676, the highest since July 18.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.11% at 93.27, just off Friday’s one-week high of 93.64.

Forex - Dollar index slips lower as markets digest NFP data
 

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