The US Dollar’s slide has finally subsided after hitting a 7-week trough versus the common currency Euro. Analysts say that moves are, however, muted given the need for cash flows to rebalance portfolios on the last day of the month, and in this case, the quarter. Earlier, the US Dollar Index seemed on pace to hit its largest single month’s decline in nearly a year, and will likely post the largest quarterly decline in 5 years. All of that is due largely to Janet Yellen’s dovish comments which resonated unfavorably with FX traders, especially those dollar bulls.
As reported at 11:17 am (BST) in London, the EUR/USD was 0.64% higher at $1.1367; the pair has ranged from a daily low of $1.1308 to a peak of $1.1375. The USD/JPY is flat at 112.4250 Yen; the pair earlier hit a session trough of 112.1500 Yen and its daily peak was at 112.6595 Yen. The US Dollar Index is down 0.18% at 94.669 .DXY; it had earlier approached 94.578 .DXY, close to the 5-month low set earlier this month.
Labor Department Numbers in Focus
Markets focus will be on today’s release of NFP labor figures. Analysts and economists are forecasting that the unemployment rate will remain at 4.9% and that 205,000 new jobs will be added. More importantly than new jobs, however, is the average earnings and any disappointment there will likely put the greenback under additional pressure.