SINGAPORE, March 5 — The dollar found its footing today as upbeat jobs data helped it recoup a little of its slide against the euro and it steadied on the yen after the US Federal Reserve’s surprise rate cut.
The safe-haven yen also handed back a fraction of recent gains, as the resurgence of moderate Joe Biden in the Democratic Party primaries lifted investors’ risk appetite.
Strong US labour-market data overnight, with February private payrolls beating expectations, helped the greenback 0.3 per cent higher on the euro to US$1.137 (RM4.74) per euro.
A dollar last bought ¥107.61 (RM4.18). An emergency 50 basis point interest rate cut by the Fed on Tuesday had sent the dollar to a five-month low of ¥106.84.
“Irrespective of Fed rate cuts, in our view demand for the dollar is likely to be firm as long as the coronavirus crisis continues and fears of recession build in various parts of the global economy,” said Jane Foley, senior FX strategist at Rabobank in London.
“We now anticipate that the eurozone will experience recession this year, while the risks that sluggish growth in Australia will turn into recession have also been heightened.”
The Australian and New Zealand dollars, heavily sold as the virus’ outbreak widened, halted a nascent advance on the greenback.
The Aussie, which had been the best performing G10 currency over the past 24 hours and has lifted nearly 3 per cent from an 11-year low hit last week, steadied at US$0.6621. The kiwi , which has climbed almost 2 per cent from a Monday trough, sat at US$0.6291.
Australia’s Treasury Department said today that it is not forecasting a recession as yet, but that the coronavirus is expected to wipe half a percentage point from first-quarter growth.
“People are looking at Aussie dollar positions and whether or not they want to be long,” said Chris Weston, head of research at Melbourne brokerage Pepperstone.
“If you have a look at the outlook, the talk of the town now is what does quantitative easing look like in Australia, when is it likely to be deployed and how much of that is priced in.”
Central bank action is also driving prices elsewhere.
The Canadian dollar was slightly weaker against its US counterpart after the Bank of Canada delivered its biggest interest rate cut in more than 10 years — though since the move mirrored the Fed, the reaction was muted.
The loonie last traded at 1.3390 per dollar.
The British pound rose against the dollar and the euro after the incoming Bank of England governor said he would wait for more clarity about the virus before moving interest rates, rather than rushing to an emergency cut.
The pound last bought US$1.2871 and traded at 86.55 pence per euro. — Reuters
