Copyright brecorder
NEW YORK: The US dollar edged up on Wednesday, extending its gains from last week on doubts about the outlook for another Fed rate cut this year and as private payrolls data assuaged worries over the state of the labor market. US private payrolls rose by 42,000 jobs in October, exceeding expectations of a 28,000 gain, according to a Reuters poll of economists. While the turnaround likely does not suggest a material shift in the labor market because some industries such as professional business services shed jobs for a third straight month, it did help soothe worries about labor market weakness. Separately, data showed the US services sector activity picked up in October amid a solid increase in new orders. The dollar has firmed against the euro after the Federal Reserve cut interest rates by 25 basis points last week while signalling caution about further easing this year. The dollar has also been helped in the last two sessions by a bout of risk aversion sweeping global financial markets as a tech-led sell-off stoked worries about stretched valuations. “The greenback is outperforming its high-beta counterparts as market participants gravitate toward the safety and liquidity offered in dollar-denominated assets,” Schamotta said. Against a basket of currencies the dollar was up 0.11 percent at 100.28, its highest since May 29. “A push through the low 100 level would suggest that the general USD rebound is likely to extend, potentially quite significantly over the next few weeks,” FX strategists at Scotiabank said in a note. “A stall and reversal from the low 100 area, meanwhile, implies a continuation of the broad consolidation range for the DXY in place since the middle of the year,” they wrote. The yen gained as much as 0.5 percent earlier in the session before reversing course to trade down 0.3 percent against the buck. Investors will be watching the US Supreme Court’s hearing on the legality of Donald Trump’s tariffs, a case with implications for the global economy and a potential catalyst for currency markets. Sterling steadied after its recent selloff, last up 0.1 percent on the day on the dollar at USD1.3034, but still near multi-month lows on the dollar and multi-year lows on the euro. The Bank of England meets on Thursday, and with market pricing showing a roughly one-in-three chance of a 25 basis point rate cut, whatever the BoE decides could cause a knee-jerk reaction in the pound. Sweden’s Riksbank’s decision to hold rates steady, as expected, did little for the Swedish crown, which was about flat on the day at 9.575 per dollar. Norway’s central bank was also scheduled to meet on Thursday. Leading cryptocurrency bitcoin rose 3 percent to around USD103,144, after bouncing back from earlier losses. It slid 6.1 percent on Tuesday to below USD99,000 for the first time since June 22.
