Dollar Steady Ahead of Jobs Report; Aussie Declines
The dollar consolidated within striking distance of its three-year low, with investors wary of taking large positions ahead of US nonfarm payrolls data due to be published later on Thursday.
The Bloomberg Dollar Spot Index was little changed; it hit a three-year low on Tuesday. Data overnight showed that employment at US companies fell in June for the first time in more than two years.
“After the shockingly weak ADP report, markets are bracing for downside surprises in today’s nonfarm payrolls,” DBS economists and strategists wrote in a note. Striking trade deals, such as the one between the US and Vietnam, “inherently implies a weaker USD bias to improve America’s export competitiveness, one reinforced by his push for aggressive Fed cuts”.
NZD/USD and AUD/USD underperformed, falling 0.3% to 0.6075 and 0.2% to 0.6573 respectively.
The US-Vietnam trade deal includes a 40% levy on any goods shipped via the Southeast Asian state. China appears to have been used that route for shipments to the US. Antipodean currencies are typically affected by developments in China.
EUR/USD was little changed at 1.1799
USD/JPY up 0.1% at 143.78
GBP/USD little changed at 1.3630.
Source: Bloomberg
