Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Down, Near Recent Lows Ahead of U.S. Economic Data

ForexAug 04, 2021 06:50
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Gina Lee

Investing.com – The dollar was down, remaining near recent lows on Wednesday morning in Asia. Better-than-expected employment data in New Zealand raised expectations for interest rate hikes, while U.S. jobs data due throughout the week could indicate the U.S. Federal Reserve’s timetable for the same.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.08% to 92.017 by 1:38 AM ET (5:38 AM GMT).

The USD/JPY pair inched up 0.01% to 109.06, with the Japanese services purchasing managers’ index (PMI) for July at 47.4.

The AUD/USD pair inched up 0.07% to 0.7399 and the NZD/USD pair was up 0.54% to 0.7052. In New Zealand, the employment change grew 1% quarter-on-quarter in the second quarter of 2021, while the unemployment rate was at a lower-than-expected 4%.

"We've flown past full employment, and the economy is becoming quite overheated," ANZ analysts told Reuters, who expect 25 basis point interest rate hikes from the Reserve Bank of New Zealand in August, October, November, February and May to carry New Zealand dollar rates from 0.25% currently to 1.5% by mid-2022.

The USD/CNY pair edged down 0.15% to 6.4605. China's private sector Caixin services PMI, released earlier in the day, was 54.9 in July, higher than the 50.3 figure from the previous month.

The GBP/USD pair inched up 0.09% to 1.3926.

In the U.S., ADP non-farm employment change for July, the Markit composite manufacturing PMI, the services PMI and the Institute of Supply Management (ISM) non-manufacturing PMI are due later in the day. The latest U.S. jobs report, including non-farm payrolls, is also due on Friday.

The data could help investors gauge the Fed’s timeline for both interest rate hikes and asset tapering. However, the dollar has now slipped more than 1% from a 15-week peak it hit a fortnight ago as investors question the strength and speed of the global economic recovery.

"The big dollar picture is that there is a pullback in Fed hike expectations, and we've seen the U.S. dollar head south,” with the focus now on the rates implications of jobs data, National Australia Bank (OTC:NABZY) senior strategist Rodrigo Catril told Reuters.

"We've all seen progress in the labor market, but the question is how much is good enough," but reaching the Fed’s target for this growth could take several consecutive months.

Safe-haven currencies have benefited from the weaker dollar as concerns about the number of COVID-19 cases globally remain. The Japanese yen has gained about 2.5% against the dollar in a month and touching its highest since late May during the previous session after falling since the start of 2021.

Another focal point for investors is the Bank of England’s policy decision, due to be handed down on Thursday. Swaps markets are already pricing an interest rate liftoff around June 2022.

"If the BOE communicates a more cautious outlook, then we could see hike bets by June 2022 pushed back, putting some pressure on sterling," Pepperstone research strategist at brokerage Luke Suddards told Reuters.

Dollar Down, Near Recent Lows Ahead of U.S. Economic Data
 

Related Articles

Bitcoin extends downtrend, falls 12.1% to $47,176
Bitcoin extends downtrend, falls 12.1% to $47,176 By Reuters - Dec 04, 2021 5

(Reuters) - Bitcoin dived 12.14% to $47,176.09 on Saturday, losing $6,567.6 from its previous close. Bitcoin, the world's biggest and best-known cryptocurrency, is down 31.6%...

Bitcoin tumbles 5.5% to $53,436
Bitcoin tumbles 5.5% to $53,436 By Reuters - Dec 03, 2021

(Reuters) - Bitcoin plunged 5.5% to $53,435.9 at 22:04 GMT on Friday, losing $3,112.06 from its previous close. Bitcoin, the world's biggest and best-known cryptocurrency, is...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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.
Continue with Google
or
Sign up with Email