Dollar steadies as traders wary about U.S. stocks, look to ECB for catalysts
The dollar steadied in holiday-thinned trade on Monday after U.S. jobs data showed job growth slowed further in August, while traders shifted their focus to the European Central Bank’s meeting on Thursday.
The U.S. Labor Department report on Friday showed that U.S. employment growth slowed and permanent job losses increased as government funding started running out, raising doubts on the sustainability of the economy’s recovery. Still, the jobless rate fell to 8.4% from 10.2% in July.
In the immediate aftermath, the greenback rallied to its highest in a week at 93.242 against a basket of six major currencies on safe-haven buying, but later retraced its gains as U.S. stock indexes recovered.
The dollar index was little changed on Monday at 92.895. Foreign exchange trading was likely to be subdued as U.S. financial markets are closed for the Labor Day holiday.
Broader sentiment on the dollar remains weak after Federal Reserve Chair Jerome Powell reiterated on Friday that the central bank plans to keep U.S. rates lower for longer.
The euro stood at $1.1834 on Monday.
The British pound fell 0.34% to $1.3235, retreating from its highest level in almost a year on fears over a no-deal Brexit.
Amid an EU-UK trade negotiations impasse, the chances of a no-deal Brexit have risen sharply as negotiations have been threatened by Britain’s insistence that it have full autonomy over its state aid plans.
UK Prime Minister Boris Johnson’s office released comments on Monday that Britain has set a deadline of Oct. 15, and if none of the free-trade deal is agreed, both sides should “accept that and move on.”
Against the yen, the dollar traded at 106.28.
Reference: CNBC
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