Dollar traded close to recent lows ahead of U.S. jobs data
The U.S. currency traded close to recent lows on Wednesday as investors are waiting for U.S. jobs data clues about the outlook for interest rates.
The dollar has lost some ground versus major rivals over the past two weeks.
However, the greenback is still up about 2% overall since a Federal Reserve meeting in June. As we all remember, at the Fed meeting, the central bank signalled it was gearing up for sooner-than-anticipated rate hikes.
On August 4, the dollar index, which measures the dollar against its rivals, was flat at 92.
The ADP employment survey is due on Wednesday, which will provide a clue on the jobs picture. Moreover, the labour market report is due on Friday.
According to currency analysts at Commerzbank, ADP data is unlikely to significantly move the greenback.
Economists polled by Reuters anticipate ADP payrolls data to show 695,000 jobs were added in July. Moreover, they expect Friday’s non-farm payrolls to show 880,000 jobs added in the previous month.
the New Zealand dollar witnessed strong gains for the second consecutive day
Additionally, the risk-sensitive currency, the New Zealand dollar, witnessed strong gains for the second consecutive day. Remarkably, a decline in unemployment in the country raised expectations rate hikes could start within weeks.
New Zealand’s unemployment rate dropped to 4% last quarter. It sent the currency 0.6% higher to a one-month peak of $0.7066.
The New Zealand dollar increased by 0.8% against the U.S. currency to trade at $0.70730.
On Tuesday, the New Zealand central bank announced its plans to tighten mortgage lending standards. The country’s central bank aims to control an inflated housing market and protect home buyers.
Furthermore, the euro against the greenback traded at $1.18610.
After falling since the start of 2021, the Japanese yen changed course in July. It has increased nearly 2.5% against the greenback in a month. It hit its highest since late May on Tuesday and traded at 109.02 on today’s session.
Meanwhile, the franc sat by a seven-week peak of 0.90235 against the dollar it made on Tuesday.
The British pound rose 0.2% ahead of a Bank of England meeting, which is due on Thursday. The sterling was trading at $1.39555 on Wednesday.
The South Korean won increased for a third straight session, adding 0.5% on Wednesday. Meanwhile, the Singapore dollar hit a one-month peak, and the Indonesian rupiah reached a seven-week high.
A backdrop of concerns about the Delta COVID-19 strain has also put support behind safe-haven currencies such as the Japanese yen and Swiss franc.
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