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Dollar steady even as yields edge up ahead of U.S. jobs report - Reuters

NEW YORK (Reuters) - The dollar took a breather on Thursday, a day after being given a boost from seemingly hawkish comments by a top Federal Reserve official, as the market awaited new direction from Friday’s U.S. jobs report.

FILE PHOTO: Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. REUTERS/Rick Wilking/File Photo

The dollar index against major currencies was down 0.03% to 92.249 in the afternoon in New York.

On Wednesday, Fed Vice Chair Richard Clarida said conditions for an interest rate hike could be met in late 2022, setting the stage for a move in early 2023.

“Clarida’s comments are allowing the dollar to stay well supported into the payrolls numbers on Friday,” said ING FX strategists Francesco Pesole and Chris Turner.

The greenback, which gained 0.2% on Wednesday, was traded in a relatively tight range through the day, unmoved by new government reports on jobless claims and the trade deficit that came in close to estimates from economists.

It also shrugged off another up-day in U.S. stocks and movement in the U.S. Treasury market, where the yield on the 10-year note rose as much as 4 basis points and was last at 1.2152%.

“The market has been in a wait-and-see mode until we get past tomorrow’s nonfarm payroll report,” said Ed Moya, senior market analyst at broker OANDA.

Friday’s employment report for U.S. employment in July is seen as highly uncertain but critical to Fed policymakers deciding when to begin tapering support for the economy.

“If we get an impressive read tomorrow, that would have the market firmly pricing in tapering and allow the yield curve to steepen and provide the dollar with support,” Moya said.

According to a Reuters survey of economists, nonfarm payrolls likely increased by 880,000 jobs in July, up from 850,000 in June. Economists have warned that the spread of the Delta variant of the coronavirus and mixed readings from labor market indicators make estimates for July troublesome.

The British pound was up 0.3% to $1.3931 by 3:06 p.m. ET (1906 GMT) after the Bank of England kept the size of its bond-buying programme unchanged and held its benchmark interest rate at a historic low of 0.1%.

The central bank said it would start reducing its stock of bonds when its policy rate reaches 0.5% by not reinvesting proceeds and that it would consider actively selling down holdings when the rate reaches at least 1%.

“The undertones of today’s policy statement and monetary policy report (MPR) are much more hawkish than initially expected,” said Simon Harvey, senior FX analyst at Monex Europe.

The euro was flat at $1.1835.

Against the yen, the dollar rose 0.25% to 109.75.

Ether, the second-largest cryptocurrency, was up 3% to $2,810 after an initial dip when the Ethereum blockchain network activated a technical change that was to take some tokens out of circulation.

Bitcoin rose 3% to $40,987.

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Currency bid prices at 3:06PM (1906 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index

92.2490 92.2810 -0.03% 2.521% +92.3520 +92.1130

Euro/Dollar

$1.1835 $1.1837 -0.02% -3.14% +$1.1857 +$1.1829

Dollar/Yen

109.7500 109.4900 +0.24% +6.22% +109.7850 +109.4050

Euro/Yen

129.89 129.57 +0.25% +2.34% +130.0200 +129.5800

Dollar/Swiss

0.9063 0.9065 -0.04% +2.42% +0.9077 +0.9052

Sterling/Dollar

$1.3931 $1.3891 +0.30% +1.97% +$1.3949 +$1.3873

Dollar/Canadian

1.2495 1.2542 -0.37% -1.87% +1.2547 +1.2476

Aussie/Dollar

$0.7405 $0.7382 +0.32% -3.74% +$0.7416 +$0.7377

Euro/Swiss

1.0726 1.0728 -0.02% -0.75% +1.0741 +1.0721

Euro/Sterling

0.8492 0.8521 -0.34% -4.96% +0.8528 +0.8491

NZ

Dollar/Dollar $0.7061 $0.7044 +0.22% -1.70% +$0.7073 +$0.7039

Dollar/Norway

8.8070 8.8465 -0.42% +2.59% +8.8495 +8.8000

Euro/Norway

10.4225 10.4555 -0.47% -0.42% +10.4763 +10.4204

Dollar/Sweden

8.6125 8.6095 +0.06% +5.08% +8.6191 +8.5995

Euro/Sweden

10.1928 10.1870 +0.06% +1.16% +10.2035 +10.1820

Reporting by David Henry in New York and Ritvik Carvalho in London; additional reporting by Wayne Cole in Sydney; Editing by Marguerita Choy and Jonathan Oatis

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https://www.reuters.com/article/global-forex-idUSL1N2PC27D

2021-08-05 19:50:00Z
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