Dollar stabilizes near three-week high ahead of US wage data
The dollar rallied on Thursday, registering its biggest daily gain in a month, after weekly jobless claims in the United States fell below 400,000 for the first time since the start of the COVID-19 pandemic over a year ago and that the private wage bill has increased much more than expected.
At 0718 GMT, the dollar index was up 0.1% on the day to 90.542, after hitting a new high three weeks earlier in the session.
The euro lost 0.1% to $ 1.21155 against the dollar.
“Yesterday’s rally in the US dollar portends a sharp decline in the overall figure, as well as a sharp upward revision to the April figure,” said Michael Hewson, chief market analyst at CMC Markets UK in a statement. note to customers.
“Anything less than a big beat on both could just see the US dollar retreat.”
Positioning data shows investors are selling dollars strongly, leaving the market hypersensitive to any suggestion of a change in direction for the currency or a change in the rate outlook.
Overnight dollar / yen implied volatility peaked above 8% monthly on Thursday JPYONO = and euro / dollar implied volatility hit its highest level since mid-March.
FX strategists in a Reuters poll were almost equally divided on the dollar’s near-term direction after two months of broad weakness, as they await clearer signs from policymakers.
The Australian dollar, which fell to its lowest since April on Thursday, held close to its lows at 0.76665, up just 0.1% on the day.
The New Zealand dollar also remained stuck near previous session lows at 0.71545.
The Japanese yen changed hands at 110.195 against the dollar.
The Chinese yuan softened beyond the 6.40 level, after retreating from its three-year highs when the Chinese central bank decided to limit the currency’s gains earlier this week.
US President Joe Biden on Thursday signed an executive order banning US entities from investing in dozens of Chinese companies with suspected ties to defense technology or surveillance sectors, a move that his administration says broadens the scope of a legally flawed Trump-era order.
Cryptocurrencies fell after a tweet from Tesla boss Elon Musk appeared to bemoan a break with bitcoin.
Tesla’s large position in bitcoin and Musk’s large number of personal followers often put crypto markets on alert every time he tweets.
As of 0736 GMT, bitcoin was down 6.6% to around $ 36,600, while ether was down 8% to around $ 2,627.
(Reporting by Elizabeth Howcroft and Tom Westbrook; editing by David Evans) (([email protected]; +44 02075427104;))