Dollar Steadies Ahead of US Jobs Data Reports
The dollar edged higher against most G-10 currencies after Treasury yields rebounded ahead of upcoming official and private jobs data. Yen pared a decline on report the Bank of Japan would hike in December.
The Bloomberg Dollar Spot Index gains 0.07% after Wednesday’s 0.4% drop that followed a shock decline in US payrolls and bolstered expectations for a Fed rate cut next week. Focus now turns to US initial jobless claims and Challenger job cuts later today, which could push near-term dovish pricing further into next year.
USD/JPY was little changed at 155.26 after touching 155.54 intraday. Spot pared losses after a Reuters report that the Japanese government is likely to tolerate an interest rate hike from the central bank. Spot had earlier sold off to 155.02 as traders eyed a selloff in 10-year JGB futures.
Australia’s dollar rose 0.1% to 0.6609, fueled by speculation of a RBA hike as early as February and 3-year yields topping 4% for the first time since January.
“On net, we remain of the view that the step down in US growth, weakening jobs market, and outlook for lower US interest rates may continue to exert downward pressure on the USD,” Peter Dragicevich, currency strategist at Corpay Inc., wrote in a note.
The USD looks to be tracking too high compared to where relative yield spreads suggest it should be.
Yields rose about two basis points across the US curve with the 10-year tenor at 4.08% and 2-year at 3.5%.
EUR/USD slipped 0.1% to 1.1659; GBP/USD down 0.1% to 1.3339.
Source : Bloomberg.com
