Dollar Struggles for Traction in Wake of NFP
The US Dollar had been broadly lower during European trading following Friday’s dismal labor report. Since then, the greenback has been struggling to gain traction. Friday’s NFP report fell far short of expectations, with previous months also revised lower. Those figures only served to increase speculation that the Fed’s “promised” 2015 rate hike is now likely to be pushed back into 2016. The only support that the Dollar is likely to get now will come from the gap disparity between the Fed and the other major central banks. Many of those banks, especially the Bank of Japan and the European Central Bank, appear on the verge of more easing.
As reported at 11:44 am (BDT) in London, the US Dollar Index was trading at 95.580 .DXY, a loss of 0.26%. On Friday, after the NFP report release, the Index fell to 95.218 .DXY, close to a 2-week low; the Dollar Index is used by FX traders to gauge the greenback’s strength relative to its major peers. The EUR/USD was 1.56% higher at $1.1286 while the USD/JPY was 120.2500 Yen, a gain of 0.21% for the greenback.
Central Bankers in Focus
In this week ahead, there are four key policy decisions to be made by the world’s central banks, including in Australia, Japan and the United Kingdom. Also, Mario Draghi, the head of the European Central Bank, will be offering a welcome speech in Germany and that could provide FX traders with some clues as to when the ECB might provide additional stimulus.