The dollar held its ground higher against its peers today on thin volume traded as it continued its recovery following Friday’s selloff triggered by a discouraging US nonfarm payroll report. The greenback suffered steep losses following the release of data which revealed that the US economy gained 126,000 jobs last month that was under half of February’s total with the past 16 months posting greater increases. The data fueled concerns over the state of the US economy and predictions for a Fed rate increase were thought to take place towards the end of the year as a result as opposed to June.
The euro weakened against the dollar on the back of data released by Markit which revealed that the services purchasing managers’ index for the euro zone ticked down from 54.3 in February to 54.2 in March while experts had forecast the index to be unchanged. Services PMI for Germany ticked up from 55.3 in February to 55.4 in March while experts had also forecast the index to be unchanged. Services PMI for France dropped from 52.8 in February to 52.4 in March compounding forecasts for the index to be unchanged.
The pound held its ground against the dollar despite figures which revealed that UK service sector output grew at a 7 month high in March. The UK services PMI jumped from 56.7 in February to 58.9 in March while experts had forecast a reading of 57.0.
The yen weakened against the dollar with the pair trading up over its 120 handle. Yen weakness is helping the pair and on the back of Friday’s nonfarm payrolls selloff the pair marked its biggest 2 day rally in 2 months. The pair’s rally is likely to continue following the FOMC’s announcement scheduled for tomorrow.
The Australian dollar strengthened but gains were curtailed while the New Zealand and Canadian dollars weakened against the greenback. The Aussie dollar had been supported by data which revealed that retail sales increased by 0.7% in February ahead of forecasts for a 0.4% increase. Also the Reserve Bank of Australia kept its key interest rate unchanged at 2.25% which the market was not surprised by.
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