* FX rates around the world are depicted graphically. tmsnrt.rs/2RBWI5E
Reuters, TOKYO, June 29 – The dollar rose to a two-month high against major peers on Tuesday, with traders mainly staying away ahead of a key U.S. jobs report that might change the timetable of the Fed’s stimulus withdrawal.
In Asia, the dollar index, which measures the value of the greenback against a basket of six major currencies, rose 0.1 percent to 91.966, closing the gap with the high of 92.408 set on June 18 after the Federal Open Market Committee surprised markets by predicting two interest rate hikes by the end of 2023.
Since then, the Fed’s commentary has emphasized the importance of data in determining when asset purchases should be tapered and interest rates raised, with Chair Jerome Powell saying recently that policymakers will not act solely on the basis of “fear” of inflation, but will encourage a “broad and inclusive” job market recovery.
According to a Reuters poll of analysts, the US Labor Department is projected to report a creation of 690,000 jobs in June, up from 559,000 in May, and an unemployment rate of 5.7 percent, down from 5.8 percent the previous month.
Investors will also be watching Tuesday’s consumer confidence data and Thursday’s manufacturing index from the Institute for Supply Management for signs on where interest rates are headed.
“Is it true that the dollar has reached its bottom and can only rise from here, or is it merely a short-term positioning adjustment? We’ve been suggesting that the latter is more important “In a conference call with journalists, HSBC’s global head of foreign-exchange research, Paul Mackel, said.
With countries reopening following the coronavirus outbreak, he believes the dollar will decline by the end of the year.
“When you have this synchronized global growth backdrop, that’s usually what happens.”
The dollar fell 0.06 percent to 110.545 yen, remaining below last week’s nearly 13-month high of 111.110.
As the more contagious Delta COVID-19 strain spread across Asia and worldwide, fanning worries of future lockdowns, both the dollar and the yen gained from some safe-haven buying.
The euro fell 0.07 percent to $1.19145, sliding closer to the two-and-a-half-month low of $1.8470 set on June 18.
“The market had been long of the single currency on optimism regarding the vaccine catch-up trade in the region (but) forecasts that the Delta variant of COVID could spread across Europe (in) the summer months could now be undermining confidence in this trade,” Rabobank strategist Jane Foley wrote in a report, lowering a one-month euro forecast to $1.19 from $1.20.
“Assuming that US data remains broadly positive throughout the year, we estimate the USD to grind marginally higher against the EUR.”
Sterling, meanwhile, fell 0.06 percent to $1.38695, reverting to a two-month low.
The Australian dollar, which is considered as a liquid barometer for risk appetite, lost 0.09 percent to $0.75580 after falling 0.31 percent earlier in the week over fears about the country’s resumed COVID-19 lockdowns.
The kiwi dollar fell 0.19 percent to $0.70280 on Tuesday, following a 0.40 percent decrease the day before. It had previously gone on a five-day winning streak after recovering from its lowest point since November.
In a client note, CBA analyst Kim Mundy said, “We expect the RBNZ to start tightening monetary policy more than a year before the FOMC, which is a tailwind for the NZD.”
“Under our coverage, the RBNZ is the most hawkish central bank.”
========================================================
At 0532 GMT, currency bid prices were as follows: RIC Last U.S. Close Pct Change YTD Pct High Bid Lowest Bidder
Changes Before
Session
$1.1918 $1.1923 -0.04 percent -2.46 percent +1.1930 +1.1908 +1.1930 +1.1908 +1.1930 +1.1908 +1.1930 +1.1908 +1.1930 +1.1908 +1.1930
Euro/Yen EURJPY=EB 131.72 131.90 -0.14 percent +3.78 percent +131.9400 +131.5900 S> Dollar/Yen 110.5300 110.5500 +0.03 percent +7.06 percent +110.6300 +110.4700 Dollar/Yen 110.5300 110.5500 +0.03 percent +7.06 percent +110.6300 +110.4700 Dollar/Yen 110.5300 110.5500 +0.03 percent +7.06 percent +110.6300 +11
Dollar/Swiss +0.04 percent +4.02 percent +0.9207 +0.9196 +0.9198 0.9200 +0.04 percent +4.02 percent +0.9207 +0.9196
1.3874 1.3880 -0.06% +1.53 percent +1.3882 +1.3859 Sterling/Dollar 1.3874 1.3880 -0.06% +1.53 percent +1.3882 +1.3859
Dollar/Canadian 1.2336 1.2342 -0.02 percent -3.09 percent +1.2348 +1.2333 -0.02 percent -3.09 percent
NZ 0.7032 0.7042 -0.19 percent -2.12 percent +0.7051 +0.7023 Dollar/Dollar 0.7560 0.7565 -0.07 percent -1.72 percent +0.7570 +0.7550 Aussie/Dollar 0.7560 0.7565 -0.07 percent -1.72 percent +0.7570 +0.7550 NZ 0.7032 0.7042 -0.19 percent -2.12 percent +0.7051 +0.7023 Dollar/Dollar Each and every location
Tokyo is located in Europe.
Volatilities
BOJ provides information on the Tokyo foreign exchange market.
(Kevin Buckland contributed reporting; Shri Navaratnam and Himani Sarkar edited the piece.)
Continue reading
