- July 5, 2021
- Posted by: Trading
- Category: News
By Peter Nurse
Investing.com – The dollar weakened in early European trade Monday, handing back some of its recent gains after Friday’s nonfarm payrolls report eased concerns about an early move by the Federal Reserve to rein in its accommodative monetary policy.
At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 92.317, after falling around 0.3% on Friday from a three-month high.
was up 0.1% at 111.13, edged down to 1.1856, rose 0.1% to 1.3831, while the risk-sensitive was down 0.1% at 0.7516, ahead of Tuesday’s Reserve Bank of Australia meeting, which could see a decision on the fate of its bond purchase program and yield target.
The dollar strengthened for large parts of last week on rising expectations of an early move by the Federal Reserve to normalize monetary policy, given surging inflation and reasonably strong U.S. employment data.
However, while Friday’s jobs report said that grew by a higher-than-expected 850,000 in June, the was also higher than expected and the pace of hourly earnings growth slowed, easing concerns that the central bank would raise interest rates sooner than expected.
This report “would probably not convince the Federal Reserve to change its current policy,” said David I. Kass, Clinical Professor of Finance with the Robert H. Smith School of Business at the University of Maryland.
Trading ranges are likely to be limited Monday, with the U.S. on holiday, and attention will likely turn to Wednesday’s release of the of the Fed’s June meeting, when officials opened talks on tapering bond-buying and pointed to interest rate increases coming sooner than previously guided.
Elsewhere, fell 0.2% to 6.4597 after a private study showed a slowing of growth in China’s services sector, with the falling to 50.3 in June, lower than May’s 55.1 figure, and a 14-month low.
fell 0.1% to 8.6690 ahead of the release of Turkey’s latest inflation data. This is expected, later Monday, to show inflation rose an annual 16.8% in June, up from 16.6% in the previous month, according to the median estimate in a Bloomberg survey of 18 analysts. Such a result would limit the chances of a cut in interest rates at the next central bank meeting.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.