Dollar Up, But Capped by Friday’s U.S. Job Data


© Reuters.  © Reuters.

By Gina Lee

Investing.com – The dollar was up on Monday morning in Asia, but gains were capped by trade that was thinned due to the Labor Day holiday in the U.S., as well as Friday’s data showing a slowdown in job growth in August.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.18% to 92.882 by 12:05 AM ET (5:05 AM GMT).

Data from the U.S. Labor Department released on Friday showed that U.S. employment growth slowed, and permanent job losses increased, with government funding drying up and rising doubts about the sustainability of the U.S. economic recovery. But the data also showed that August’s jobless rate fell to 8.4% from 10.2%.

“The jobs data, which showed a decline in the unemployment rate, and a rise in U.S. Treasury yields, are supporting the dollar today,” Mizuho Securities chief currency strategist Masafumi Yamamito told Reuters.

“However, what’s weighing on the currency is a huge drop in U.S. stocks (last week),” Yamamito warned, referring to stock tumbling on Thursday, the biggest two-day slide since June.

Investors are now focusing on the European Central Bank’s inflation forecasts before it hands down its policy decision on Thursday, but the policy itself is widely expected to remain unchanged.

The USD/JPY pair inched up 0.04% to 106.28. Japan is due to release a slew of economic data on Tuesday, which include household spending, the current account and the gross domestic product figures.

The AUD/USD pair inched up 0.08% to 0.7285. Earlier in the day, Australian biotechnology company CSL (OTC:CSLLY) Ltd said that it would manufacture two COVID-19 vaccine candidates, one being developed by AstraZeneca (NYSE:AZN) and Oxford University upon the completion of successful trials and the other being developed by CSL alongside the University of Queensland. Australia expects to have the first doses from both candidates within 2021.

The NZD/USD was down 0.21% to 0.6706.

The USD/CNY pair edged down 0.17% gain of 6.8293, with China releasing mixed trade data for August earlier in the day. While exports increased 9.5% year-on-year from July’s 7.2% increase, imports fell 2.1% year-on-year, more than July’s 1.4% decrease. The trade balance stood at $58.93 billion, down from July’s $62.33 billion.

The GBP/USD pair was down 0.32% to 1.3239, with increasing fears of a no-deal Brexit seeing the GBP fall from its highest level in almost a year. The Brexit impasse continues, with Britain’s insistence over full autonomy over its state aid plans increasing the risk of a deal being finalized before the cut-off date of December 31.


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