The U.S. Dollar Index edged away from a recently struck 7-week peak during Friday’s Asian trading session as investors anxiously await the government’s release of private sector jobs date which will either reaffirm or question the Fed’s intention to begin tapering of its long held QE program. The fact that investors were willing to sit on the sidelines ahead of the report released helped to boost the common currency Euro which had earlier been skittish in the wake of unexpectedly dovish commentary from the European Central Bank. Market players believe that a positive outcome for the NFP labor figures will result in quick rebound for the greenback.
As reported at 10:45 a.m. (JST) in Tokyo, the U.S. Dollar Index was trading at 80.953 .DXY, slipping from a 2-month high of 81.187 .DXY; the Index is often used by investors to gauge the greenback’s strength against its major rivals. The USD/JPY slipped to 104.83 Yen from yesterday’s peak at 105.06 Yen, while the EUR/USD was up at $1.3604, edging away from the recently struck 1-month trough of $1.3548.
ECB Takes Dovish Stance
The outcome of yesterday’s policy meeting of the European Central Bank left market players concerned about the dovish tone of the board which sent the Euro spiraling lower. The ECB reiterated that it was fearful that a deflationary trend could pose a threat to the Eurozone and would be watching carefully to see if money market rates rose which would jeopardize their economic recovery.