The dollar strengthened against its peers today on thin volume traded amid ongoing worry regarding China’s economic outlook as the greenback remained underpinned by solid US jobs data released on Friday. The US Labor Department revealed that 292,000 jobs were added to the US economy in December surpassing forecasts of an increase of 200,000. US unemployment was at 5% in December at a 7.5 year low. The data boosted expectation that the Federal Reserve will raise interest rates at a faster pace this year. The US Dollar Index was up 0.35% trading at 98.80.
The euro weakened against the dollar with the pair down 0.57% trading at 1.0864 off its session low of 1.0847 after having come off its session high of 1.0969. The pair was still trading near Friday’s low of 1.0801. The release of meeting minutes from the European Central Bank this Thursday will be a big event for the euro after a rough start to the year driven by sentiment more than anything else.
The pound strengthened against the dollar with the pair up 0.22% trading at 1.4556 off its session high of 1.4603 after having come off its session low of 1.4492 reached earlier in the day. Bank of England Governor Carney is due to speak tomorrow. The BOE is expected to raise rates before completion of its asset purchase program.
The yen weakened against the dollar with the pair up 0.11% trading at 117.57 off its session high of 118.02 after having come off its session low of 116.69 reached earlier in the day. The yen was pressured to near 5 month lows following the People’s Bank of China’s initiative to support the yuan by raising its daily midpoint rate higher against the dollar, while further declines in China’s equity market tarnished outlook on the world’s second largest economy. The central bank had devalued the yuan 8 days in a row prior to guiding the yuan stronger twice which has lessened concern regarding the currency’s weakness. Bank of Japan Governor Kuroda is scheduled to speak tomorrow.
The Australian, New Zealand and Canadian dollars strengthened against the greenback. These commodity associated currencies had met some pressure as oil continues to trade at its lowest level in 12 years. The Aussie was up 0.83% against the dollar with the pair trading at 0.7010 off its session high of 0.7035 after having come off its session low of 0.6927. The Aussie had pulled away from a 4 month low, recouping after China suspended its stock market and after the PBOC moved to support the yuan. China is Australia’s biggest export partner while being New Zealand’s 2nd biggest export partner. The kiwi dollar rose 0.26% against the greenback with the pair trading at 0.6561 off its session high of 0.6579 after having come off its session low of 0.6508 reached earlier in the day. The loonie gained over 0.5% against the greenback with the pair trading at 1.4225 off its session high of 1.4244 after coming off its session low of 1.4064 reached earlier in the day. The loonie edged out the dollar with the pair coming off a new 12.5 year peak reached overnight as the market took profit on the back the greenback’s recent rally.
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