The dollar hovered just above a one-month low on Monday, with traders holding tight positions heading into a busy week that includes U.S. jobs data and an Australian central bank decision.
The dollar index, which measures the greenback against six major peers, stood at 92.065, down slightly from Friday, when it dipped as low as 91.775 for the first time since June 28.
The index dropped 0.88% last week, its worst performance since early May, after Federal Reserve Chair Jerome Powell reiterated mid-week that rate increases were “a ways away” and the job market still had “some ground to cover.”
The dollar index last month hit its highest since the start of April at 93.194 as traders positioned for a start to tapering as soon as this year.
Economists in a Reuters poll forecast a 926,000 job increase in July’s non-farm payrolls number, due Friday, which would be the biggest increase for 11 months. The U.S. unemployment rate is forecast to fall to 5.7%, from 5.9% in June.
“The U.S. payrolls will be a marquee event risk,” Chris Weston, head of research at broker Pepperstone, wrote in a note to clients.
“If we do see the elusive 1 million jobs created, then calls for a September announcement for tapering the asset-purchases program will ramp up,” buoying the dollar, whereas a print of around 703,000 or lower would push the currency lower, he said.
The dollar was little changed at 109.67 yen on Monday, and slightly weaker at $1.1873 per euro.
In cryptocurrencies, bitcoin slipped 0.36% to trade below $40,000, after sliding 5.67% over the weekend.
Smaller rival ether experienced opposite fortunes, holding gains from the weekend to trade around $2,550. It climbed as high as $2,699 on Sunday for the first time in almost two months, up from as low as $1,717.17 less than two weeks ago.
· Treasury yields rise to start the week ahead of PMI data
U.S. Treasury yields started the week higher, ahead of the release of purchasing managers' index data.
The yield on the benchmark 10-year Treasury note rose less than a basis point to 1.242% at 3:30 a.m. ET. The yield on the 30-year Treasury bond added 2 basis points, advancing to 1.916%. Yields move inversely to prices. One basis point equals 0.01%.
· China's bearish PMI, virus cases hit yuan; more policy easing expected
China's yuan extended its decline on Monday after it posted a second month of losses in July, with sentiment dampened by disappointing economic data and investor worries over spreading domestic COVID-19 cases of the Delta variant.
In the spot market, onshore yuan opened at 6.4640 per dollar and was changing hands at 6.4653 at midday, 33 pips weaker than the previous late session close.
Traders said markets were expecting more monetary and fiscal stimulus in coming months after both official and private factory activity surveys suggested a slowdown in the Chinese economy, while local coronavirus outbreaks added to uncertainty over the uneven economic recovery.
Reference: Reuters, CNBC
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