Dollar loses steam and wavers ahead of U.S. jobs data
The dollar wavered against the yen and euro on Thursday, its advance stalling ahead of a closely-watched U.S. non-farm jobs report on Friday which is expected to shape the market's near-term interest rate expectations.
Earlier in the week, the U.S. currency had carved out significant gains against its peers following comments from Federal Reserve Chair Janet Yellen last Friday at a central bankers' gathering in Jackson Hole, Wyoming that revived near-term rate hike prospects.
The market awaited Friday's jobs report to see if U.S. labor conditions are strong enough to justify the Fed's monetary policy stance.
"The dollar and Treasury yields had risen in tandem following Jackson Hole last week but that phase came to an end yesterday. The dollar will not be making much further headway before Friday's non-farm employment report," said Shin Kadota, chief Japan FX strategist at Barclays (LON:BARC) in Tokyo.
The euro was flat at $1.1162 , having rebounded on Wednesday from a three-week low of $1.1123. The dollar index (DXY) was little changed at 95.929 after pulling back overnight from a three-week peak of 96.255.
China services and manufacturing PMIs expanded in August
Factory activity in China expanded at its fastest pace in nearly two years in August, an official survey showed Thursday, although analysts cautioned that the world's second-largest economy wasn't out of the woods yet.
The official manufacturing Purchasing Managers' Index (PMI), which mainly tracks large state-owned companies, rose to 50.4 last month, the highest reading since October 2014. August's print was well above Reuters estimates for a 49.9 result and beating July's reading of 49.9 and the 50.0 logged in June.
A number above the 50-level indicates growth, while one below 50 suggests contraction.
Another PMI survey focused on small and mid-sized firms by Markit/Caixin came in at 50 last month, slightly missing estimates for 50.1 and below July's 50.6 reading. A third survey meanwhile revealed the official services PMI fell to 53.5 in August, down from 53.9 in July.
Oil Gains as Saudis See Steady Output After U.S. Stockpiles Rise
Oil rose after dropping the most in a month as Saudi Arabia said it won’t boost output to capacity and flood a market that’s contending with a global inventory overhang of crude and fuel supplies.
Futures rose as much as 0.7 percent in New York after falling 6.2 percent the previous three sessions. The market is saturated with stored crude and Saudi Arabia doesn’t see a need for the kingdom to produce at full capacity, Energy Minister Khalid Al-Falih told Al-Arabiya television as OPEC members plan to meet this month to discuss action to stabilize prices.
Reference: Investing,CNBC,Reuters
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