2023-07-06 19:38:09
The move cooled, with strength in the pound and euro, as investors pondered the disparities with the tightening cycle in Europe
The dollar retreated against strong rivals, but advanced against most of the emerging ones. The US currency gained strength across the board after data suggest resilience in the US labor market and services sector, which reinforces tightening by resuming monetary tightening by the Federal Reserve (Fed). However, the movement cooled, with strength in the pound and euro, as investors weighed the disparities with the tightening cycle in Europe.
In the late afternoon in New York, the dollar retreated to 144.14 yen. The DXY index fell by 0.20% to 103.166 points.
After even advancing against the euro and the pound, the dollar ended the day lower against its European rivals. Around 5 pm (Brasília time), the euro advanced to US$ 1.0890, gaining momentum over the American currency this afternoon after the director of the European Central Bank (ECB) Joachim Nagel reinforced that interest rates should remain high for a prolonged period of time in block. Nagel stressed that the course of restrictive policy has not yet ended in the euro zone and that, currently, there are no risks of excessive tightening.
The pound advanced to US$ 1.2741. According to an analysis by CMC Markets, the British currency received modest support from UK government bond yields (Gilts) and increased trader bets on the possible terminal interest rate in the country. In a report, the Financial Times reports that the chance of interest rates reaching March 2024 at 6.5% led the probabilities in market monitoring tools.
In the morning, however, the dollar rose against most of the strong and emerging currencies, supported by a set of data demonstrating the resilience of the labor market and the services sector in the United States. The ADP report estimated the creation of nearly 500,000 jobs in the private sector, while two readings of the Purchasing Managers’ Index (PMI) year, leading to flight from risky assets.
As predicted by ING, the effects of this Thursday’s data were short-lived for the dollar and, now, investors should focus on the publication of the main US jobs report, the payroll, to be released tomorrow. consulted by Broadcast projectionsthe report should present the creation of 225 thousand jobs in the month of June.
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