DJ U.S. Dollar Weakens on Jobs Report, Fiscal Stimulus
By Julia-Ambra Verlaine
The dollar is losing some momentum, dropping as a weaker-than-expected jobs report (https://www.wsj.com/articles/january-jobs-report-unemployment-rate-2021-11612475063) lessens the case that the U.S. will economically outperform other countries in a post-coronavirus rebound. The euro and japanese yen recouped previous losses against the dollar Friday.
Dollar skeptics cite large U.S. deficits and increased government spending on the heels of the $1.9 trillion stimulus package announced this morning (https://www.wsj.com/articles/biden-meets-with-house-democrats-as-covid-19-aid-plan-advances-11612542026). Analysts say the sustainability of such a spending plan depends on the Federal Reserve containing rates to keep borrowing costs low, a negative for the dollar.
"Over the medium term, we do not see U.S. assets as attractive enough -- or rest-of-the-world assets as unattractive enough -- to make this financing easy," said Steve Englander, head of currency strategy and North America macro strategy at Standard Chartered.
The WSJ Dollar Index, which measures the dollar against 16 foreign currencies, is down 0.44% Friday at 85.83.
NOTE: In-line links reference additional content of interest chosen by the WSJ news team.
This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).
(END) Dow Jones Newswires
February 05, 2021 12:11 ET (17:11 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.