The U.S. Dollar began the trading week in Asia lower as investors are still reeling from Friday’s unexpectedly weak labor report which gave FX traders a reason to pull back on the greenback after several weeks of gains. Last Friday, the U.S. Labor Department reported that new jobs for October rose by only 214,000, well off the 231,000 that analysts had forecast and far off the upwardly revised 256,000 for September. For some investors, those numbers suggest that the Federal Reserve might once again rethink its position as regards an interest rate hike.
As reported at 8:52 a.m. (GMT) in London, the EUR/USD was trading at $1.2471, a loss of 0.2% while against the Yen, the USD/JPY was trading 0.5% lower at 144.08 Japanese Yen. The U.S. Dollar Index, a gauge of the greenback’s relative strength against its peers, was down about 0.1% to 87.3240 .DXY.
SNB Resolve Questioned
In Switzerland, the Swiss Franc was flirting with the SNB’s long-established ceiling against its neighbor, the common currency Euro, trading close to 1.20 Swiss Francs. The Swiss central bank has been able to maintain the cap for the past three years, and has only had to intervene twice to reinforce it. Some analysts point out that near zero inflation in Switzerland could force the SNB’s hand for further easing; however, the majority of experts don’t feel that the SNB is prepared to move especially given the lack of interest.