Dollar slides, consolidates recent gains, ahead of U.S. payrolls data
The dollar fell on Thursday, consolidating recent gains that pushed it to nearly three-year highs during the first quarter, but the outlook remained upbeat in the wake of improving economic prospects backed by the Biden government’s more than $2 trillion stimulus plan.
Investors are now looking to Friday’s non-farm payrolls report to confirm their positive view on the dollar and the economy.
The dollar gained 3.6% against a basket of six currencies in the first three months of the year, its best quarterly performance since June 2018, with investors betting on a swift and robust economic recovery.
In afternoon trading, the dollar index slipped 0.3% to 92.933.
The 10-year U.S. Treasury note fell 6.9 basis points to yield 1.677%.
The dollar though slipped a bit after the jobless claims report, with claims of 719,000 in the week ended March 27.
The dollar index’s gains in the first quarter came as the euro, the biggest component in the index, struggled on concerns the euro zone’s recovery is being hampered by a third wave of COVID-19 infections.
France’s President Emmanuel Macron ordered the country into its third national lockdown and said schools would close for three weeks. The euro zone also lags the United States in vaccination programs.
Sentiment toward Europe, though, received a boost when data showed euro zone monthly factory activity growth galloped at its fastest pace in the nearly 24-year history of a leading business survey.
The euro was last up 0.3% at $1.1768.
The dollar was down 0.1% against the yen at 110.61 yen, after ending March with its biggest monthly gain since November 2016. It rose as high as 110.97 on Wednesday, the highest in a year. The U.S. non-farm payrolls report is the major data release this week, with economists expecting an increase of about 650,000 jobs in March.
In observance of Good Friday, Reuters will not be putting out market reports during the European hours.
Reference: CNBC, Reuters
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