Dollar Nurses Losses as US Economic Doubts Undercut Rally

Dollar
FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul February 7, 2011. REUTERS/Lee Jae-Won/File Photo

TOKYO — The dollar nursed losses against most currencies on Monday as disappointing U.S. jobs data caused some investors to scale back bets on a rebound in the greenback.

The euro held gains versus the dollar but faces a test later on Monday with data that is expected to show German industrial output growth slowed at the end of last year.

Speculators have been reducing short positions in the dollar, but some analysts say better U.S. economic data and continued progress in fighting the coronavirus pandemic will be needed for further dollar gains.

“Soft non-farm payrolls has really pulled the ladder out from under the dollar,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities.

“Now the markets are questioning whether the dollar can rise any further. A lot depends on the coronavirus, but we also need to know when U.S. fiscal stimulus will pass.”

Continue Reading Below ↓

Against the euro, the dollar traded at $1.2048 after a 0.7% slump on Friday.

The British pound bought $1.3736, close to an almost three-year high.

The dollar was quoted at 105.38 yen, having pulled back from a three-month high reached on Friday.

The U.S. economy created fewer jobs than expected in January while job losses the previous month were deeper than initially reported, data at the end of last week showed.

The release of U.S. consumer prices and consumer sentiment later this week will help determine whether a recent rise in inflation expectations and Treasury yields was justified.

Any disappointing numbers from either report could knock the dollar lower, some analysts warn.

The dollar index against a basket of six major currencies stood at 91.084, nursing a 0.6% loss from Friday.

Speculators’ net bearish bets on the dollar fell to $29.95 billion for the week ended Feb. 2, compared with a net short position of $33.81 billion for the previous week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data.

In the cryptocurrency market, ethereum fell 3.88% to $1,615, extending a pullback from a record high ahead of the listing of ethereum futures on the Chicago Mercantile Exchange.

Bitcoin, the most popular cryptocurrency, fell 0.88% to $38,936.

Elsewhere, the Australian dollar held steady at $0.7678. Across the Tasman Sea, the New Zealand dollar edged up to $0.7209.

Reporting by Stanley White; Editing by Sam Holmes; Reuters

Total
1
Shares

Leave a Reply

Previous Post
Japan

Japan’s Economic Recovery From Pandemic Likely Stalled in Fourth Quarter: Reuters Poll

Next Post
Deutsche

Taiwan Punishes Deutsche Bank, Others in Currency Speculation Case

Related Posts