Dollar Sentiment Sours Ahead of US Payrolls Data
Dollar weakness remained the dominant theme across spot and options markets as traders braced for Tuesday’s US November payrolls report.
The Bloomberg Dollar Spot Index slips 0.1% to stay near a two-month low; the Treasury 10-year yield is little changed around 4.17%.
Economists are projecting a 50,000 increase in payrolls in November. October retail sales data is also due.
Interbank desks are not looking to trade the headlines as they acknowledge the risk of a large standard error on the job numbers, according to Europe-based traders .
One-week and one-month risk reversals skew firmly toward dollar downside, with bearish conviction at the strongest levels since mid-September.
The yen and the pound outperform Group-of-10 peers; expectations mount that the Bank of Japan will raise the benchmark interest rate later this week while British businesses enjoyed the sharpest pick-up in new work in more than a year.
USD/JPY falls 0.4% to 154.68 in, its second day of declines; overnight-indexed swaps signaled a 95% chance of a BOJ rate hike this week, up from 58% at the end of last month. All 50 economists surveyed by Bloomberg unanimously anticipate the move.
GBP/USD rises 0.3% to 1.3415; UK unemployment climbed to its highest level in almost five years and wage growth eased, cementing the case for a widely expected Bank of England interest-rate cut later this week.
NZD/USD is little changed at 0.5784; New Zealand’s bond yields dropped as the nation lowered projections for debt issuance.
Source : Bloomberg
