Advertisement

US Dollar on Guard as Inflation Test Looms

0
266
FILE PHOTO: Four thousand U.S. dollars are counted out by a banker at a bank in Westminster © Thomson Reuters
Advertisement

______________________________________________________

Dollar on guard as US inflation test looms

Story by By Rae Wee • 9h

SINGAPORE (Reuters) – The dollar was on the defensive on Monday after a mixed U.S. jobs report provided little directional conviction and as market focus turned to inflation data from the world’s two largest economies due this week.

The U.S. economy added fewer jobs than expected in July, data on Friday showed, but it recorded solid wage gains and a decline in the unemployment rate.

While the dollar fell to a one-week low against a basket of currencies in the aftermath of the data, its losses were capped as the report pointed to a still-tight labour market, suggesting the Federal Reserve may need to keep rates higher for longer.

The U.S. dollar index was last 0.08% higher at 102.14, edging away from Friday’s low of 101.73.

Sterling fell 0.11% to $1.2737, while the euro lost 0.14% to last stand at $1.0994.

“There was a narrative in there for everyone, depending on your bias,” said Pepperstone’s Head of Research Chris Weston of the jobs report.

______________________________________________________

Advertisement

______________________________________________________

“We are seeing a cooling of the labour market, but it’s not collapsing. It’s doing what we hoped it would do.”

“It’s hard to see the pullback being big across the dollar pairs, because fundamentally the U.S. has still got the best growth, you got a central bank which is still very much data dependant, and I think there are risks this week that the CPI number comes out above expectations,” said Weston.

Also due this week is China’s July inflation print on Wednesday, with traders on the lookout for further signs of deflation in the world’s second-largest economy.

“(We) see the country’s headline CPI to register a deflation this July after growth in consumer prices stalled in June,” said MUFG analysts in a note.

“While the narrative of soft recovery in China likely remains intact in the short term, continued support from the Chinese government should boost the yuan.”

The Chinese yuan hovered near a two-week low on Monday, with its offshore counterpart last 0.2% lower at 7.2042 per dollar.

On Friday, a Chinese official said during a press conference by the state planner that liquidity in the country’s banking system would be kept reasonably ample, though investors were left wanting for more amid Beijing’s slow roll out of support to revive its economy.

______________________________________________________

Advertisement

______________________________________________________

Elsewhere, the Australian dollar edged 0.04% lower to $0.6568, while the New Zealand dollar gained 0.01% to $0.60985.

The yen fell nearly 0.3% to 142.13 per dollar, after hitting a one-week high of 141.52 per dollar in early Asia trade.

The Bank of Japan debated growing prospects of sustained inflation at their July meeting with one board member saying wages and prices could keep rising at a pace “not seen in the past,” according to a summary of opinions released on Monday.

Source: MSN

______________________________________________________

If you wish to contact the author of any reader submitted guest post, you can give us an email at UniversalOm432Hz@gmail.com and we’ll forward your request to the author.
______________________________________________________

All articles, videos, and images posted on Dinar Chronicles were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes.

Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on this site. Information posted on this site may or may not be fictitious. We do not intend to and are not providing financial, legal, tax, political or any other advice to readers of this website.

Copyright © 2022 Dinar Chronicles

Advertisement

LEAVE A REPLY

Please enter your comment!
Please enter your name here