News: FOREX-Dollar drops on mixed data, trade optimism

  1. 184,654 Posts.
    lightbulb Created with Sketch. 2711
    • U.S. added more jobs than expected in October
    • U.S. manufacturing contracted in October
    • Dollar weighed down by trade optimism, slowdown fears

    (Updates prices)

    The dollar dropped on Friday after data showed a mixed view on the economy, and as optimism that the United States and China will reach a deal to end their trade war reduced safe-haven demand for the greenback.

    The dollar initially gained after U.S. jobs growth slowed less than expected in October, while wages gained and hiring in the prior two months was stronger than previously estimated.

    “The data is much better than expected. Markets were braced, certainly in headline terms, for some much weaker numbers given the expected impact from the GM strike and the census hiring. So very good data in that context,” said Shaun Osborne, chief foreign exchange strategist at Scotiabank in Toronto.

    Striking workers who do not receive a paycheck during the payrolls survey period are treated as unemployed. The strike by about 46,000 workers at GM plants in Michigan and Kentucky ended last Friday.

    Temporary census workers also left their jobs during the month.

    The U.S. currency was unable to hold onto the gains, however, and was further dented after the Institute for Supply Management (ISM) said the manufacturing sector contracted for the third consecutive month in October.

    The dollar index against a basket of six major currencies .DXY fell to 97.24, down 0.12% on the day. It earlier rose to 97.45 on the jobs data.

    The dollar has weakened since the Federal Reserve on Wednesday cut interest rates for the third time this year, and indicated that further reductions may not be forthcoming.

    Concerns about a slowing American economy is weighing on the greenback, however, with the U.S. central bank expected to resume rate cuts if the economic data worsens.

    “There is a bit more vulnerability starting to feed into the dollar, with perhaps the U.S. economy slowing down,” Osborne said.

    Fed Vice Chair Richard Clarida said on Friday that the rate cuts put into effect leave the U.S. economy better armed to withstand the risks of a global slowdown.

    Safe-haven flows into the U.S. currency have also weakened on optimism that the United States and China are close to reaching a deal to end their trade war, which has been blamed for slowing global growth.

    U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin made progress on a variety of issues during a telephone call on Friday with China's Vice Premier Liu He about an interim trade agreement, USTR said in a statement on Friday.

    	======================================================== 
    	Currency bid prices at 2:06PM (1806 GMT) 
    
     Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
    											  Previous				   Change				  
    											  Session											
     Euro/Dollar	  EUR=		$1.1160		$1.1150	 +0.09%		 -2.69%	  +1.1171	 +1.1129 
     Dollar/Yen	   JPY=		108.2200	   108.0200	+0.19%		 -1.85%	  +108.3200   +107.9000 
     Euro/Yen		 EURJPY=	 120.80		 120.46	  +0.28%		 -4.29%	  +120.9300   +120.3700 
     Dollar/Swiss	 CHF=		0.9856		 0.9863	  -0.07%		 +0.43%	  +0.9894	 +0.9854 
     Sterling/Dollar  GBP=		1.2935		 1.2940	  -0.04%		 +1.40%	  +1.2972	 +1.2928 
     Dollar/Canadian  CAD=		1.3139		 1.3159	  -0.15%		 -3.65%	  +1.3195	 +1.3139 
     Australian/Doll  AUD=		0.6911		 0.6893	  +0.26%		 -1.96%	  +0.6920	 +0.6885 
     ar																							  
    
     Euro/Swiss	   EURCHF=	 1.1002		 1.0999	  +0.03%		 -2.24%	  +1.1027	 +1.0999 
     Euro/Sterling	EURGBP=	 0.8628		 0.8615	  +0.15%		 -3.96%	  +0.8636	 +0.8596 
     NZ			   NZD=		0.6436		 0.6411	  +0.39%		 -4.18%	  +0.6455	 +0.6407 
     Dollar/Dollar																				   
    
     Dollar/Norway	NOK=		9.0924		 9.1906	  -1.07%		 +5.25%	  +9.1983	 +9.0864 
     Euro/Norway	  EURNOK=	 10.1508		10.2490	 -0.96%		 +2.47%	  +10.2585	+10.1500 
     Dollar/Sweden	SEK=		9.5671		 9.6499	  -0.77%		 +6.73%	  +9.6563	 +9.5517 
     Euro/Sweden	  EURSEK=	 10.6812		10.7641	 -0.77%		 +4.06%	  +10.7710	+10.6700                    
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.