The dollar weakened against its peers today holding its ground just under its 11 year plus peak as the market went into profit taking following Friday’s dollar rally on the back of solid US nonfarm payrolls data. Predictions for a Fed rate increase to take place half way through the year were fueled by the US employment data being better than forecast which supported the dollar.
The euro strengthened against the dollar regaining ground after coming off lows set overnight near its 1.08 handle. The euro faces continued pressure as Greece’s bailout is still being ironed out. Euro zone finance ministers are set to review details of changes made to Greece’s proposed reforms. A bailout extension of 4 months was agreed upon last month as a temporary measure and in order for Greece to receive additional aid its proposed reforms must be accepted by its creditors.
The pound strengthened against the dollar while its gains were curtailed as Friday’s US nonfarm data continued to boost the dollar. The US economy gained 295,000 jobs in February beating forecasts of an increase of 240,000 while the unemployment rate inched down from 5.7% in January to 5.5% in February marking a near 7 year low. The pound was stronger against the euro.
The yen weakened against the dollar losing ground gained overnight with the pair trading up over its 121 handle setting a 3 month high. Overnight the yen had strengthened following the release of revised 4th quarter GDP data which was worse than originally reported.
The Australian dollar weakened while the New Zealand dollar was virtually unchanged against the dollar. These commodity associated currencies had been underpinned by data released yesterday which revealed that Chinese exports had increased activity during January and February.
The Canadian dollar strengthened against the dollar following figures which revealed that Canadian housing starts increased by 156,300 units in February falling shorts of forecasts for an increase of 179,000.
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