Home Business Dollar steadies as focus turns to job data
Dollar steadies as focus turns to job data

Dollar steadies as focus turns to job data


The dollar held steady versus a basket of currencies on Friday, as investors shifted their focus to U.S. jobs data, with President Donald Trump’s nomination of Federal Reserve Governor Jerome Powell to be the next Fed chair coming as no surprise.

Trump on Thursday tapped Powell to lead the U.S. central bank, breaking with precedent by denying incumbent Janet Yellen a second term but signalling a continuation of her cautious monetary policies.

Trump’s decision was in line with what market participants had been expecting, and the dollar showed limited reaction after the news.

The dollar index last stood at 94.684, having pulled up from a one-week low of 94.411 set on Thursday.

The greenback had slipped on Thursday after Republicans in the U.S. House of Representatives released proposals to overhaul the tax code.

Republicans called for slashing the corporate tax rate to 20 percent from 35 percent, cutting tax rates on companies’ foreign profits and on individuals and families.

Congressional passage of the legislation, however, was far from certain.

While the contents of the tax reforms seem positive for the dollar, there is still uncertainty over how quickly it can be implemented, said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.

“This could be quite a drawn out process,” Innes said.

Later on Friday, the dollar could take its cues from U.S. economic data, including jobs data for October and the Institute for Supply Management’s gauge of services sector activity.

U.S. job growth likely rebounded sharply in October after hurricane-related disruptions depressed employment in September. A strong jump could seal the case for the Fed to raise interest rates in December even as wage growth probably slowed.

Against the yen, the dollar eased 0.1 percent to 114.00 yen, trading below a 3-1/2 month high of 114.45 yen that had been set last Friday. Trading volumes were thinner than usual with Japanese markets closed for a public holiday.

While the generally positive risk sentiment is likely to support the dollar against the yen, dollar-selling interest among Japanese exporters could temper any gains in the greenback, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.

The euro held steady at $1.1659.

Sterling nursed its losses after suffering its biggest one-day fall against the dollar since June on Thursday, after the Bank of England raised interest rates for the first time in more than a decade but said it sees only gradual rises ahead.

Sterling inched up 0.1 percent to $1.3070, after having tumbled 1.4 percent on Thursday. The BoE voted 7-2 to increase its benchmark Bank Rate to0.50 percent from 0.25 percent.

The Australian dollar slipped 0.4 percent to $0.7687, coming under pressure after data showed that retail sales were flat in September. That was below market expectations for a rise of 0.4 percent on the month.

%d bloggers like this: