Dollar takes a pause ahead of U.S. jobs data

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NEW YORK (Businesshala) – The dollar was steady against a basket of currencies on Thursday, a day ahead of US labor market data that could offer clues to the timing of the Federal Reserve’s next move.

FILE PHOTO: One hundred dollar notes are seen in this photo taken in Seoul February 7, 2011. Businesshala/Lee Jae-won/File photo

Most of the major currency pairs are tied to familiar ranges, with traders reluctant to place big bets before the data is released.

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“There is a general pre-nonfarm payroll slack in the market today,” said Michael Brown, senior analyst at payments firm Caxton in London.

The US dollar currency index, which measures the greenback against a basket of six currencies, was unchanged, trading at 94.199, not far from last week’s one-year high of 94.504.

“I think we’ll probably range that way until the jobs report is out, although even then any US dollar weakness should fade,” Brown said.

The Federal Reserve has said it could begin reducing its monthly bond purchases as early as November and then follow up with interest rate hikes, as the US central bank’s turn from pandemic crisis policies gains momentum. .

Friday’s non-farm payrolls data is expected to show continued improvement in the labor market, with a forecast for 455,000 jobs in September, a Businesshala poll showed.

“Continuous recovery in the US labor market and solid US economic growth should provide the green light for the Federal Reserve to curb its quantitative easing program,” Mark Heifel, chief investment officer at UBS Global Wealth Management, said in a note.

In the week following the data, the dollar reversed most gains or losses from the day of the NFP release, FX strategists said in a BofA Global Research report on Thursday.

The number of Americans filing new claims for jobless benefits fell last week, but layoffs rose from a 24-year low in September as hospitals fired unvaccinated workers and labor shortages forced facilities to close. force to.

Sterling rose 0.3% on Thursday as global risk sentiment improved and analysts said the Bank of England’s rate hike prospects eased some downside for the currency.

In the digital currency space, bitcoin, the world’s largest cryptocurrency by market cap, fell from a nearly five-month high of $55,800 on Wednesday, up from around $54,040.48 in previous trading.

Reporting by Saqib Iqbal Ahmed Editing by Raisa Kasolowski and David Gregorio

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