Lower dollar edges; Employment data key views this week
By Peter Nurse
Investing.com – The dollar fell slightly on Wednesday, remaining close to recent lows ahead of the release of key US employment data that could guide the Federal Reserve’s monetary policy thinking.
At 02:55 ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading 0.1% lower at 91.990, just above the low of the last week of 91.775, the lowest since June 28.
USD / JPY rose 0.1% to 109.10, GBP / USD gained 0.1% to 1.3931, EUR / USD traded 0.1% to 1.1871, and the risk-sensitive AUD / USD rose 0.1% to 0.7404.
The dollar has struggled to advance since Federal Reserve Chairman Jerome Powell last week indicated that interest rate hikes were still at bay, saying more progress was still needed, especially on the work market.
With improving employment numbers seen as a prerequisite for rate hikes, traders will be closely following the release in the ADP payroll report, expected at 8:15 am ET (12:15 GMT), as a guide.
Elsewhere, the NZD / USD rose 0.6% to 0.7055 after the unemployment rate fell more than expected in the second quarter, increasing the likelihood of interest rate hikes in the near future.
The unemployment rate fell to 4% from 4.6% revised in the first quarter. This, added to the annual inflation rate which climbed to 3.3% in the second quarter, suggests that the country’s central bank could start raising interest rates as early as this month.
USD / BRL edged up to 5.1975 ahead of Brazil’s last central bank policy meeting. In June, the central bank raised its benchmark Selic interest rate by 75 basis points to 4.25%, its third consecutive hike, to fight inflation, which was well above target. Analysts expect the Selic to rise full one percentage point this week.