The dollar was virtually unchanged against its peers today on thin volume traded as US markets were closed for the Labor Day holiday and as investors kept a watchful eye leading up to the Federal Reserve’s next policy meeting. Data released on Friday revealed that the US economy gained 173,000 jobs in August following an increase of 245,000 in July which marked the lowest gain in employment since April compounding forecasts an increase of 220,000. The US unemployment rate inched down from 5.3% in July to 5.1% in August which was its lowest level in over 7 years while average hourly wages data beat forecasts rising 2.2%. The market is still looking for a clearer indication as to when the Fed will begin increasing its key interest rate.
The euro strengthened against the dollar with the pair up 0.11% trading at 1.1163 near its session high of 1.1177 after having come off its session low of 1.1121 reached earlier in the day. The euro maintained support following last week’s announcement from the European Central Bank which revealed its preparedness for ramping up its stimulus program given the heightened risk of deflation within the euro zone due to China’s economic downturn and decline in oil prices.
The pound strengthened against the dollar with the pair up 0.65% trading at 1.5269 off its session high of 1.5287 after having come off its session low of 1.5170 reached earlier in the day. The pair lost nearly 250 points last week, its biggest loss in a week since May. The pound had been pressured by below forecast PMI data as well as risk off trade which typically boosts demand for the dollar, yen and the euro over the pound. Key event for the pound this week is the release of manufacturing production data due on Wednesday.
The yen weakened against the dollar with the pair rising 0.29% trading at 119.36 off its session high of 119.59 after having come off its session low of 118.80 reached earlier in the day. Most of the day’s range occurred during the European session with the US closed today as the pair remained bid after the Nikkei closed higher.
The Australian dollar strengthened while the New Zealand dollar weakened against the greenback. The Aussie gained 0.40% against the dollar with the pair trading at 0.6935 off its session high of 0.6950 after having come off its session low of 0.6912 reached earlier in the day. Data revealed that Australian job advertisements rose by 1.0% in August following a decline of 0.5% in July. The kiwi dollar dropped 0.40% against the greenback with the pair trading at 0.6263 off its session low of 0.6243 after having come off its session high of 0.6301 reached earlier in the day. The kiwi revisited 6 year lows of late as expectations of an imminent rate hike by the Fed supported the dollar.
The Canadian dollar held its ground against the greenback with the pair trading steadily at 1.3278 off its session low of 1.3244 on thin volume with US and Canada closed for Labor Day. The loonie still faced pressure from the continued decline in oil prices while the market lacked a clear picture as to when the Fed will raise rates.
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