Uncertainty as to whether the Dollar’s strength is likely to continue has forced the greenback into the defensive position, even in spite of last Friday’s upbeat jobs report. Nearly all of the gains made in the wake of the NFP release have been unwound by traders as they ponder the Federal Reserve’s likely next move given both an improved labor market and a strengthening Dollar; the Federal Reserve’s dual mandate is to ensure full employment and stable prices.
As reported at 9:18 am (BDT) in London, the USD/JPY was trading at 124.35 Yen, a loss of 0.1% and moving well away from last Friday’s peak at 125.86 Yen. The EUR/USD was trading at $1.1251, a pip from the session low and moving away from the trading day’s high of $1.1342, which was generally seen as a factor of a narrowing interest rate gap. The US Dollar Index was trading at 95.157 .DXY, a loss of 0.15%.
Obama Denies Talking Down Dollar
Recently, it was alleged that the US President had said he was uncomfortable with the Dollar’s strength; through the White House denied the rumor, the damage had already been done with many FX traders paring their Dollar longs. One currency strategist in Germany pointed out that despite the rumors of what the US President did or didn’t say, he believes that the market is clearly unready to see a stronger greenback.