01/08/2021

FOREX-Dollar holds advantage as economic data point to more gains

By Stanley White

TOKYO, April 5 (Reuters)The dollar was poised to extend gains against major currencies on Monday after the U.S. jobs report at the end of last week showed the nation’s labour market is recovering from the impact of the coronavirus shock.

The focus now shifts to data on the U.S. services sector due later on Monday, which is forecast to show an acceleration in activity that could further encourage dollar bulls.

In January-March the dollar posted its best quarter against major currencies in almost three years thanks to an improving U.S. economy and rising Treasury yields.

The U.S. currency is likely to build on those gains as investors look for ways to bet on a global economic recovery from the worst of the coronavirus pandemic, analysts said.

“I thought there would be a correction lower in the dollar, but that didn’t happen,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“The dollar’s upward trend is very strong. In the new quarter perhaps the best thing for investors to do is to just follow this trend.”

The dollar was last quoted at 110.63yen JPY=D3, not far from its strongest level in a year.

Against the euro EUR=D3, the dollar traded at $1.1765, which is close to a five-month high.

The British pound GBP=D3 held steady at $1.3824.

The dollar edged up to 0.9423 Swiss franc CHF=EBS.

The U.S. economy created more jobs than expected in March, data showed on Friday. However, there was scant reaction in currencies as most major stock and bond markets were closed for Easter holidays.

Trading could be subdued again on Monday in Asia as financial markets in Australia, China, and Hong Kong are also closed, although the bias is for the dollar to strengthen further, analysts said.

A survey from the Institute for Supply Management due later on Monday is expected to show U.S. non-manufacturing activity expanded at a faster rate in March, which could underpin the greenback on its forward march.

The dollar index =USD against a basket of six major currencies was little changed at 92.973,

Dollar short positions in the currency market fell last week to the lowest since June last year, U.S. Commodity Futures Trading Commision data showed – another positive sign for the greenback.

Elsewhere, the Australian dollar AUD=D3 edged up to $0.7616, while the New Zealand dollar NZD=D3 bought $0.7028.

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Currency bid prices at 0025 GMT

Description

RIC

Last

U.S. Close Previous Session

Pct Change

YTD Pct Change

High Bid

Low Bid

Euro/Dollar

EUR=EBS

$1.1765

$1.1752

+0.11%

-3.70%

+1.1768

+1.1752

Dollar/Yen

JPY=D3

110.6300

110.6700

+0.00%

+7.15%

+110.7400

+110.6700

Euro/Yen

EURJPY=

130.17

130.13

+0.03%

+2.54%

+130.2500

+130.1300

Dollar/Swiss

CHF=EBS

0.9423

0.9408

+0.19%

+6.54%

+0.9430

+0.9421

Sterling/Dollar

GBP=D3

1.3824

1.3825

-0.04%

+1.16%

+1.3830

+1.3820

Dollar/Canadian

CAD=D3

1.2568

1.2585

-0.13%

-1.30%

+1.2586

+1.2566

Aussie/Dollar

AUD=D3

0.7616

0.7591

+0.34%

-0.99%

+0.7620

+0.7607

NZ Dollar/Dollar

NZD=D3

0.7028

0.7017

+0.16%

-2.13%

+0.7031

+0.7023

All spots FX=

Tokyo spots AFX=

Europe spots EFX=

Volatilities FXVOL=

Tokyo Forex market info from BOJ TKYFX

World FX rateshttps://tmsnrt.rs/2RBWI5E

(Reporting by Stanley White Editing by Shri Navaratnam)

((stanley.white@tr.com; +81 (0)3 4563 2799; twitter.com/stanleywhite1 ;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.