Read for 4 minutes (Reuters) – SINGAPORE (Reuters) – On Wednesday, the dollar held on to recent gains as virus fears arose in a market already on edge before of U.S. jobs data that is considered as critical to the Federal Reserve’s monetary policy outlook. FILE PHOTO: A Korea Exchange Bank employee counts one hundred US dollar bills during a photo opportunity on April 28, 2010 at the bank’s headquarters in Seoul. Jo Yong-Hak/Reuters/File Photo The Australian and New Zealand dollars both fell roughly 0.7 percent overnight, indicating that risk-sensitive commodity currencies had led overnight losses. Overnight, the euro sank 0.2 percent, while the safe-haven currencies like the Japanese yen and Swiss franc remained unchanged. The euro was last seen at $1.1902 per dollar, and the yen was last seen at 110.58 per dollar in Asian morning trading. The Australian spent $0.7517. “Currencies have a bit of a pessimistic bent,” said Westpac analyst Sean Callow. “It’s the line you’d anticipate on a risk-off day, and maybe it’s a little insurance ahead of payrolls,” he added, referring to labor data due Friday in the United States. Overnight, the dollar index jumped 0.2 percent to a one-week high, and on Wednesday, it was broadly in the middle of the range it has found in the aftermath of the Fed’s unexpectedly hawkish turn in tone earlier this month. A new rise in global coronavirus infections, as well as tight measures to prevent them, fueled the risk-averse atmosphere, threatening to stall the pandemic recovery. As the contagious delta strain spreads, case numbers are breaking daily records in Indonesia, lockdowns are being extended in Malaysia and expanded in Australia, and tourists from the United Kingdom are facing new restrictions. Traders are also apprehensive of a surprise from U.S. economic data, which begins with private payrolls later on Wednesday but focuses on total labor figures due on Friday. Signs of labor market strength might put pressure on the Fed to move even faster on interest rate hikes, lifting the dollar, while the currency could be vulnerable if the data falls short of expectations. “It’s unusually difficult to forecast, so the chance of a surprise is huge,” Westpac’s Callow said. “Extremely strong could amplify the reaction to the (Fed), while extremely weak may retaliate against those who bought dollars after the (Fed).” Private payrolls are expected to increase by 600,000 in June, according to economists polled by Reuters, down from 987,000 a month ago. The non-farm payrolls are expected to increase by 690,000 jobs on Friday. “It’s not only about non-farm payrolls, it’s about the entire labor market,” said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney, adding that hourly earnings and the unemployment rate will be closely monitored as well. “There is also a broad dispersion in terms of estimates, implying that a few people will be disappointed with either a soft or a fairly strong result.” ======================================================== At 108 GMT, currency bid prices were as follows: RIC RIC RIC RIC RIC RIC YTD Pct Pct Pct Pct Pct Pct Pct Pct Pct Pct Pct Pct Highest Bidder Lowest Bidder Previous Alteration Session Dollar/Yen110.5450 110.5400 +0.02 percent +7.04 percent +110.5900 +110.5600Euro/Yen131.55 131.49 +0.05 percent +3.65 percent +131.6500 +131.5000Dollar/Swiss$1.1900 $1.1896 +0.03 percent -2.60 percent +1.1907 +1.1894Dollar/Yen110.5450 110.5400 +0.02 percent +7.04 percent +110.5900 +110.5 +4.11 percent +0.9212 +0.9208 -0.02 percent 0.9211 0.9212 -0.02 percent -0.02 percent -0.02 percent -0.02 percent -0.02 percent -0.0 Sterling/Dollar1.3850 1.3840 +0.10 percent +1.40 percent +1.3854 +1.3839Dollar/Canadian1.2402 1.3840 +0.10 percent +1.40 percent +1.3854 +1.3839 1.2404 -0.02 percent -2.61 percent +1.2403 +1.2368 percent 1.2404 -0.02 percent -2.61 percent 1.2404 -0.02 percent -2.61 percent 1.2404 Aussie/Dollar0.7513 0.7513 +0.03 percent -2.31 percent +0.7520 +0.7510NZ$NZ$NZ$NZ$NZ$NZ$NZ$NZ$NZ$NZ$NZ$NZ$NZ Dollar/Dollar 0.6993 0.6994 +0.00% -2.60% +0.6996 +0.6989 +0.6996 Each and every location Locations in Tokyo Locations in Europe Volatilities Tom Westbrook contributed reporting, and Shri Navaratnam edited the piece. Continue reading
