The U.S. dollar on Monday recovered some of the losses sustained after last week’s poor U.S. jobs report, helped by firmer U.S. Treasury yields in a big week for main central banks.
The U.S. dollar index advanced 0.1% to 92.23, after declining to 91.941. The index fell to 91.941 for the first time since August 4 on Friday.
Last week more precisely on Friday, U.S. labor report showed the world’s largest economy created the fewest jobs in seven months in August. Nevertheless, worse than expected jobs report did not trigger a new wave of dollar selling on Monday as the dollar spent the Asian session pushing higher against its rivals. As a result, some major currencies including the euro and the Australian dollar moved back to pre-Friday jobs report levels.
Benchmark 10-year U.S. Treasury yields rose to more than a two-week high, and that factor also helped the greenback. U.S. markets are closed on Monday, contributing to lower volumes.
Many analysts remain bearish on the outlook for the dollar. Strategists from Citibank expect the greenback to decline in the coming months as the Fed postpones tapering plans to November. Nevertheless, hedge funds quietly ramped up bullish nets. According to the latest data, hedge funds increased bets on the greenback versus the euro for a second consecutive week.
U.S. dollar and its Australian counterpart
Most of the greenback’s gains was focused on the Australian dollar which weakened 0.17% to $0.7435. The Aussie fell ahead of a central bank decision on Tuesday. National Australia Bank predicts the Reserve Bank of Australia will reduce asset purchases again.
The euro was also unable to extend its gains on Monday after rising above $1.19. The single currency surpassed the $1.19 level for the first time since the end of July. The euro was trading 0.1% weaker at $1.1873 before a European Central Bank (ECB) policy decision on Thursday.
It is too early for the European Central Bank to call time on emergency stimulus, according to economists. Still, the ECB could agree to slow the pace of its bond buys after the euro area inflation jumped to a 10-year high at 3% last week.
The main cryptocurrency Bitcoin was about flat at $51,785.60, after earlier touching $51,920, a level not seen in several months. Its rival Ether traded little changed at $3,942.77 after topping $4,000 last week for the first time since mid-May.
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