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At a bank in Westminster, Colorado, a banker counts US dollars. Wednesday, November 3, 2009. Rick Wilking/REUTERS/File Photo (Reuters) – LONDON, July 5 (Reuters) – On Monday, the dollar fell against a basket of other currencies after hitting a snag last week as a mixed bag of US labor statistics allayed market fears of a speedier conclusion to monetary stimulus. While the headline job creation figure for June topped expectations, unemployment rose slightly and workforce participation remained unchanged, indicating positive progress but room for the Federal Reserve to hold off on ending asset purchases or raising rates. Bonds gained, stocks increased, and the dollar fell as a result of the report, falling the most versus risky Australian and New Zealand dollars, as well as the rate-sensitive yen. While attempting a rebound in Asian and early European trading, the greenback had sunk to its lowest levels since Wednesday by lunchtime in London. It rose 0.2 percent against the New Zealand dollar, which was trading at $0.7022, fell 0.05 percent to 110.94 yen, and was last unchanged at $1.1863 per euro. Markets in the United States are closed on Monday in observance of the Fourth of July holiday. In a note to investors, ING strategists wrote, “Friday’s NFP jobs report delivered something for everyone in terms of an above-consensus NFP gain, but also an above-consensus unemployment rate.” “The dollar ended the day marginally down as interest rate markets in the United States revised their position on early Fed tightening. The fact that today is a US federal holiday means that trade will be light, but the Fed narrative will resurface on Wednesday evening as investors pore over the minutes of the key June 16th FOMC (Federal Open Markets Committee) meeting. “The dollar index recently traded at 92.262, down 0.1 percent from Friday’s close. However, economists believe the dollar has room to rise higher after rising 2% in the three weeks since the Fed startled investors with expected hikes in 2023. “Since the Fed’s hawkish tilt in June, the dollar has become increasingly sensitive to the quality of domestic data, while certain DM and EM rivals continue to grapple with COVID outbreaks,” Maybank analysts in Singapore wrote in a research note. “As a result, this dollar surge may be able to last a little longer, and a rosy risk environment may not be wholly harmful to the greenback at this time.” Sterling was 0.2 percent higher at $1.3860 in other currency markets, while emerging market currencies in Asia made minor gains to catch up with the dollar’s Friday loss. MINUTES Traders’ attention this week is focused on the minutes from the Fed’s June meeting, which are coming Wednesday, as well as a meeting of Australia’s central bank, both of which have the ability to jolt currencies out of months of range trading amid policy uncertainty. “More clarity on when the FOMC could trim its asset purchases can raise U.S. interest rates and the currency,” Commonwealth Bank of Australia analyst Joe Capurso said, referring to the Federal Open Market Committee, which sets interest rates in the United States. “More evidence that the FOMC’s inflation forecast is altering is also possible. Analysts will be on the lookout for evidence that the FOMC is losing faith in the temporary nature of the inflation increase “he stated “Or that the Fed’s tolerance for inflation overshoot is dwindling.” A Reserve Bank of Australia (RBA) meeting on Tuesday has markets on pins and needles since the central bank has hinted at a decision on the future of its bond buying program and yield goal. The cash rate is unlikely to change, but economists expect the RBA to keep the three-year yield goal on the April 2024 bond line – rather than extending it to the November 2024 bond line – and to take a flexible approach to bond purchases. “Despite strong terms-of-trade, RBA policy has successfully limited AUD strength; nevertheless, with undervaluation approaching historical extremes, dovish shocks may have less impact on FX,” according to analysts at BoFA Global Research. On Monday, cryptocurrencies were offered, with bitcoin trading at $33,737, down 4% from its 20-day moving average, and ether trading at $2,229. Ritvik Carvalho contributed reporting; Tom Westbrook contributed additional reporting in Singapore; and Kevin Liffey and Toby Chopra edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More

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