Dollar sees weekly fall; Aussie jumps
NEW YORK (Aug 10 ) The U.S. dollar eked out a minor gain versus most major rivals Friday, but saw a weekly decline as the currency remained vulnerable to a retreat in U.S. Treasury yields as traders weigh when the Federal Reserve will begin scaling back the flow of monetary stimulus.
The ICE dollar index, which tracks the U.S. currency’s movement against six rivals, traded at 81.131, compared with 81.028 late Thursday, leaving it on track for a weekly decline of around 1%.
The WSJ Dollar Index, which uses a slightly wider comparison basket, fell to 73.31 from 73.36.
Many traders “are no longer willing to rely on speculation regarding imminent tapering,” said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt. “The market wants to see deeds now and, above all, it is missing clearer information from Fed President Ben Bernanke. So far the latter has been relatively evasive, knowing full well that his comments are more important for the market than those of his colleagues.”
The dollar didn’t find much support after a number of Fed officials this week said tapering of bond purchases looked likely to occur by the end of the year. The U.S. unit also declined along with U.S. Treasury yields, as the bond market ran into technical factors that have pushed yields lower.
The dollar has remained under pressure since last Friday’s report that the U.S. economy created a less-than-expected 162,000 jobs in July. This added uncertainty as to when the Federal Reserve will start slowing the pace of asset purchases that some consider to be a weight on the value of the greenback.
The U.S. unit fetched 1.0280 Canadian dollars in recent action, a loss of 0.5% from Thursday. The U.S. unit temporarily erased an earlier loss after data showed Canada unexpectedly lost 39,400 jobs in July, the second consecutive decline and the biggest since March.
Analysts were looking for a rise of around 10,000.
“This report also confirms last week’s U.S. nonfarm payrolls disappointment in suggesting that employment trends in North America may not be as strong as had been thought until recently,” said Colin Cieszynski, senior market analyst at CMC Markets.
The dollar traded as high as C$1.0351 versus the loonie in the wake of the data.
The euro and the British pound on Friday trimmed weekly gains versus the greenback.
The euro on Friday slipped to $1.3340 from a level of $1.3384 late Thursday, leaving it up 0.5% for the week.
Meanwhile, the Canadian dollar took over the forex spotlight Friday, temporarily retreating sharply from earlier gains after a disappointing jobs report, then pushing to a fresh high.
