SINGAPORE, Dec 5 — The dollar struggled to gain a foothold today and was languishing at five-month lows as traders looked past stronger than anticipated US jobs data, while growing hopes of China reopening boosted risk sentiment.
The dollar index, which measures the currency against six major peers including the yen and euro, was down 0.18 per cent at 104.28, its lowest since June 28. The index fell 1.4 per cent last week.
The dollar initially jumped on Friday after US data showed that employers added 263,000 jobs in November, well above estimates of 200,000, but gave up the gains as traders booked profits, with some of the Fed speakers allaying market concerns.
“We move past US payrolls with only a momentary shake for risky markets,” said Chris Weston, head of research at Pepperstone, noting that the data supported the ‘soft landing’ argument and is unlikely to change the Fed’s course, where a 50 basis point hike next week is still the firm default position.
“With limited data to drive this week and no Fed speakers, the market may start to think for itself and look at massaging exposures ahead of next week,” Weston added.
Investor focus will firmly be on the US consumer price inflation data due on December 13, one day before the Fed concludes its two-day meeting.
The US central bank is expected to increase rates by an additional 50 basis points at the meeting. Fed funds futures traders are now pricing for the Fed’s benchmark rate to peak at 4.92 per cent in May.
Also, weighing on the dollar was growing hopes of China slowly reopening, with more Chinese cities announcing an easing of coronavirus curbs yesterday.
The Australian dollar rose 0.54 per cent to US$0.683, while the kiwi was 0.12 per cent higher at US$0.642.
The euro was up 0.09 per cent to US$1.0547, having gained 1.3 per cent last week. Sterling was last trading at US$1.2298, up 0.09 per cent on the day.
The Japanese yen weakened 0.11 per cent versus the greenback at 134.46 per dollar, having gained 3.5 per cent on the greenback last week. — Reuters
