Dol­lar Bears Un­daunted af­ter Burn­ing in Jobs Rally

The Economic Times - - Finance & Commodities -

Bloomberg

Dol­lar bears, singed by the cur­rency’s big­gest rally since Jan­uary, say they’re still hold­ing their ground. Bloomberg’s dol­lar in­dex surged as much as 0.8% on a gov­ern­ment re­port show­ing that the US added 209,000 jobs in July, beat­ing the con­sen­sus pre­dic­tion of 180,000. The data high­lighted the strength of the world’s big­gest econ­omy and sparked a sur­pris­ing re­ver­sal for the green­back, which sat close to a 15-month low ahead of Fri­day’s re­port. The end re­sult, though, is that the dol­lar is merely back to around where it started the week against the euro, which held above a key tech­ni­cal level that it breached last week for the first time since Au­gust 2015. The dol­lar-bear camp can also take cheer in one ob­ser­va­tion: Ex­pec­ta­tions for the pace of Fed­eral Re­serve tight­en­ing barely budged on the re­port. “It is more of a story of pro­vid­ing un­der­ly­ing dol­lar sup­port at key lev­els rather than a full-on re­ver­sal,” said Alan Ruskin, global co-head of for­eign-ex­change re­search at Deutsche Bank. The dol­lar ended Fri­day at $1.1773 per euro, about 0.2% weaker on the week. Europe’s shared cur­rency bot­tomed out just above the $1.1714 level it ex­ceeded last week for the first time in al­most two years.

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