Dollar trades near recent lows
The dollar traded near recent lows on Wednesday as investors awaited U.S. jobs data for a guide on the outlook for interest rates.
The greenback has lost some ground against major rivals over the past two weeks, on warnings from the U.S. Federal Reserve that the job market still had “some ground to cover” before it eases stimulus, training eyes on jobs data.
But it is still up around 2% overall since a Fed meeting in June at which the central bank flagged it was gearing up for sooner-than-expected rate hikes.
On Wednesday the dollar index was broadly flat at around the 92 mark.
Investors will get a clue on the jobs picture later on Wednesday with publication of the ADP employment survey, ahead of Friday’s labor market report.
“The U.S. labor market report on Friday is likely to be the highlight of this week for the markets,” currency analysts at Commerzbank said in a note, adding ADP data would provide a “foretaste” but was unlikely to significantly move the dollar.
The New Zealand dollar made strong gains for the second consecutive day, after a drop in unemployment in the country raised expectations rate hikes could begin within weeks.
The kiwi was last up 0.8% against the U.S. dollar, at $0.70730.
The country’s central bank had said on Tuesday it would soon begin consulting on ways to tighten mortgage lending standards, as it tries to control an inflated housing market and protect home buyers.
“The heat we’ve been hearing and warning about regarding New Zealand’s labour market has been borne out,” said analysts at Bank of New Zealand.
“This surely removes any doubt about the (central bank) soon removing its foot from the accelerator.”
The U.S. dollar was broadly flat against other major currencies, with the euro at $1.18610 and the yen at 109.120.
Sterling edged up 0.2% ahead of a Thursday Bank of England meeting, at $1.39355.
