TOKYO, Feb 8 — The dollar steadied against most currencies today as traders awaited more data on the US economy after a disappointing jobs report last week slammed the breaks on a rally in the greenback.
The euro held gains versus the dollar but faces a test later today with data that is expected to show German industrial output growth slowed at the end of last year.
Speculators have been reducing short positions in the dollar, but some analysts say better US economic data and continued progress in fighting the Covid-19 pandemic will be needed for further dollar gains.
“Soft non-farm payrolls has really pulled the ladder out from under the dollar,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities.
“Now the markets are questioning whether the dollar can rise any further. A lot depends on the coronavirus, but we also need to know when US fiscal stimulus will pass.”
Against the euro, the dollar traded at US$1.2042 (RM4.90) after a 0.7 per cent slump on Friday.
The British pound bought US$1.3731, close to an almost three-year high.
The dollar was quoted at ¥105.49, having pulled back from a three-month high reached on Friday.
The US economy created fewer jobs than expected in January while job losses the previous month were deeper than initially reported, data at the end of last week showed.
The release of US consumer prices and consumer sentiment later this week will help determine whether a recent rise in inflation expectations and Treasury yields was justified.
Any disappointing numbers from either report could knock the dollar lower, some analysts said. Investors are also closely monitoring a US debate on additional fiscal stimulus.
President Joe Biden and his Democrats are pushing ahead with US$1.9 trillion Covid-19 relief package. House of Representatives Speaker Nancy Pelosi has predicted the final relief legislation could pass Congress before March 15.
The dollar index against a basket of six major currencies stood at 91.045, after falling 0.6 per cent on Friday.
Speculators’ net bearish bets on the dollar fell to US$29.95 billion for the week ended February 2, compared with a net short position of US$33.81 billion for the previous week, according to calculations by Reuters and US Commodity Futures Trading Commission data.
In the cryptocurrency market, ethereum spot prices rose 0.09 per cent to US$1,618 after the listing of ethereum futures on the Chicago Mercantile Exchange on Sunday.
Bitcoin, the most popular cryptocurrency, fell 0.42 per cent to US$38,693.
The onshore yuan edged up slightly to 6.4577 per dollar, but trade is likely to be subdued before week-long Chinese New Year holidays beginning Thursday.
Elsewhere, the Australian dollar held steady at US$0.7675. Across the Tasman Sea, the New Zealand dollar edged up to US$0.7200. — Reuters
