The dollar was stuck in neutral on Monday, after hitting a speed bump when last week’s mixed bag of U.S. labour data allayed investor fears about a hastening end to monetary stimulus.
While the headline June job creation figure beat forecasts, unemployment ticked higher and workforce participation didn’t budge - suggesting positive progress, but space for the Federal Reserve to wait before tapering asset buying or hiking rates.
The dollar index was flat at 92.334, having dropped to that level on Friday. But with a 2% rise in the three weeks since the Fed surprised investors with projected hikes in 2023, analysts think the dollar has room to rise a bit further.
It steadied with slight but broad gains in the Asia session--rising about 0.2% against the kiwi, which sat at $0.7017, gaining about 0.1% to 111.13 yen and climbing by about the same margin to $1.1853 per euro.
Elsewhere, sterling was 0.1% softer at $1.3818 and emerging market currencies in Asia made small gains to catch up with the dollar’s Friday drop.
Cryptocurrencies were offered on Monday, with bitcoin below its 20-day moving average at $34,119 and ether down 3% at $2,252.
U.S. markets are closed on Monday for the Independence Day holiday.
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Traders focus this week is on minutes from the Fed’s June meeting--due Wednesday--and on meeting of Australia’s central bank, with both having the potential to rouse currencies from months of range trading amid uncertainty around policy outlook.
Also on the horizon this week is a Reserve Bank of Australia (RBA) meeting on Tuesday, which has markets on tenterhooks because the central bank has flagged a decision on the fate of its bond purchase programme and yield target.
Reference: Reuters
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