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FOREX-Dollar softens after ADP; euro hits one-month high

reuters.com · 09/01/2021 15:28
FOREX-Dollar softens after ADP; euro hits one-month high

New throughout, updates prices, market activity and comments, adds bitcoin, ethereum

Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Chuck Mikolajczak

- The dollar fell against a basket of major currencies on Wednesday after a report on the U.S. labor market missed expectations by a wide margin, while the euro climbed to a one-month high on inflation worries.

The greenback fell after the ADP National Employment Report showed private payrolls rose by 374,000 in August, up from 326,000 in July but well short of the 613,000 forecast. nL1N2Q30WG A report on weekly initial jobless claims arrives on Thursday and on Friday the government releases the payrolls report for August, which could provide clues about the Federal Reserve's policy path.

"Certainly the recovery has been uneven but if nonfarm payrolls should also disappoint, that would seemingly close the door to an imminent taper and keep the dollar in a bit of a funk," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington DC.

The dollar has been under pressure since Friday, when Fed Chair Jerome Powell said at the Jackson Hole conference that while tapering could begin this year, the central bank was in no hurry to raise interest rates. nL1N2PY1FI

Concerns about rising COVID-19 cases denting the economic rebound could also serve to keep the central bank from scaling back stimulus.

Other data showed U.S. manufacturing activity increased more than anticipated in August, but a measure of employment in factories fell to a nine-month low, likely due to a shortage of workers.

The dollar index =USD fell 0.203% and hit a new one-month low of 92.376.

The euro rose against the greenback to a one-month high as inflation worries persisted following data on Tuesday which showed euro zone inflation increased to 3% year-on-year in August, the highest in a decade and above the European Central Bank's 2% target, as well as the 2.7% Reuters forecast. nL1N2Q20QH

The euro EUR= was up 0.3% to $1.1843, after rising to as much as 1.1857, its highest level since Aug. 5.

"We have seen numbers that argue against keeping policy so low for so long and that has been helping the euro... it is certainly going to heighten the focus on the QE debates next week when we hear from the ECB," said Manimbo.

German Bundesbank President Jens Weidmann said euro zone inflation risks overshooting ECB projections and the central bank should prepare for the end of its 1.85 trillion euro Pandemic Emergency Purchase Program (PEPP). nF9N2N601N

The ECB is scheduled to hold a policy meeting on Sept. 9.

The Japanese yen strengthened 0.04% versus the greenback at 109.97 per dollar, while sterling GBP= was last trading at $1.3773, up 0.14% on the day.

In cryptocurrencies, Bitcoin BTC=BTSP last rose 2.9% to $48,521.68 while Ethereum ETH=BTSP last rose 8.18% to $3,713.24. Ether rose as high as $3,791.28 on the day, its highest level since May 16.

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Currency bid prices at 3:18PM (1918 GMT)

Description

RIC

Last

U.S. Close
Previous
Session

Pct Change

YTD Pct
Change

High Bid

Low Bid

Dollar index

=USD

92.4620

92.6620

-0.20%

2.757%

+92.7900

+92.3760

Euro/Dollar

EUR=EBS

$1.1844

$1.1809

+0.30%

-3.06%

+$1.1857

+$1.1794

Dollar/Yen

JPY=EBS

109.9850

109.9950

+0.00%

+6.45%

+110.4150

+109.8800

Euro/Yen

EURJPY=

130.25

129.88

+0.28%

+2.62%

+130.4400

+129.8900

Dollar/Swiss

CHF=EBS

0.9149

0.9153

-0.02%

+3.44%

+0.9189

+0.9140

Sterling/Dollar

GBP=D3

$1.3773

$1.3756

+0.13%

+0.82%

+$1.3797

+$1.3732

Dollar/Canadian

CAD=D3

1.2616

1.2614

+0.02%

-0.93%

+1.2637

+1.2581

Aussie/Dollar

AUD=D3

$0.7369

$0.7314

+0.75%

-4.21%

+$0.7384

+$0.7308

Euro/Swiss

EURCHF=

1.0837

1.0806

+0.29%

+0.28%

+1.0850

+1.0807

Euro/Sterling

EURGBP=

0.8599

0.8582

+0.20%

-3.78%

+0.8602

+0.8574

NZ Dollar/Dollar

NZD=D3

$0.7067

$0.7050

+0.23%

-1.61%

+$0.7077

+$0.7034

Dollar/Norway

NOK=D3

8.6905

8.6915

-0.01%

+1.21%

+8.7100

+8.6690

Euro/Norway

EURNOK=

10.2940

10.2636

+0.30%

-1.65%

+10.2996

+10.2460

Dollar/Sweden

SEK=

8.6089

8.6237

+0.09%

+5.03%

+8.6465

+8.5927

Euro/Sweden

EURSEK=

10.1959

10.1870

+0.09%

+1.19%

+10.2070

+10.1825


(Reporting by Chuck Mikolajczak
Editing by Mark Heinrich and David Gregorio)

((charles.mikolajczak@tr.com; @ChuckMik;))