GMT Frankfurt London New York Sydney Tokyo
Live Quotes
Live Crypto
July 09, 2018

Dollar sags after soft U.S. wages data, Brexit woes weigh on pound


Dollar sags after soft U.S. wages data, Brexit woes weigh on pound
Dollar sags after soft U.S. wages data, Brexit woes weigh on pound

By Shinichi Saoshiro

TOKYO (Reuters) - The dollar struggled near 3-1/2-week lows against its peers on Monday after U.S. jobs data showed slower-than-expected wages growth, while the pound retreated as a key member of Britain's cabinet resigned over Prime Minister Theresa May's Brexit plan.

The dollar index against a basket of six major currencies (DXY) was 0.1 percent lower at 93.962. (DXY).

It had lost nearly 0.5 percent on Friday and stooped to 93.921, its lowest since June 14, after closely-watched U.S. wages indicators disappointed the market.

Data on Friday showed average U.S. hourly earnings gained five cents, or 0.2 percent in June after increasing 0.3 percent in May. This pointed to moderate inflation pressures that dented expectations that the Federal Reserve would raise interest rates a total of four times in 2018.

Nonfarm payrolls did rise by a stronger-than-expected 213,000 in June, Friday's data also showed, although this had little impact on currencies.

"The wages component has been the focal point for the market for a while now, rather than the nonfarm payrolls, and the dollar slipped accordingly. The flattening of the U.S. yield curve, perhaps reflecting worries about the economic impact of trade conflicts, is also a key factor weighing on the dollar," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.

The 10-year Treasury yield (US10YT=RR) fell to its lowest level in nearly six weeks on Friday. As a result the spread between the two- and 10-year yields was at its flattest in 11 years.

The dollar was little changed at 110.42 yen after losing 0.2 percent on Friday.

The euro was 0.1 percent higher at $1.1752 (EUR=). The single currency had risen 0.45 percent on Friday, when it brushed $1.1768, its strongest since mid-June.

The pound was effectively flat at $1.3295 .

Sterling had climbed to $1.3328 earlier in the session, its highest since June 14, before pulling back after sources told Reuters British Brexit Secretary David Davis had resigned in a blow to Prime Minister Theresa May.

"The latest headlines are negative for the pound, but there are underlying expectations for the Bank of England to raise rates and that could help limit potential losses," Ishikawa at IG Securities said.

Related Articles


We offer free education in forex, commodities, stock market, CFD and Cryptocurrencies by trading forecast, technical analysis, technical tools, and business news, we also offer real time quotes, live charts, market overview, market data and economic calendar.

Contact Form