On Thursday after a narrower-than-expected U.S. trade deficit for October and better continuing jobless claims, the dollar fell versus euro and reduced its gains against the yen . This has pared the safe-haven demand for the greenback.
Before the data’s release the euro rose from $1.4725 to $1.4748 EUR=, raised up 0.2% on the day. The dollar dropped down against the yen from 88.30 yen JPY= to 88.14 yen before the data, although it was still up for the day.
On Monday in New York, the dollar reduced its overnight gains against the euro as investors are waiting for a speech later in the day by the head of the Federal Reserve to see whether ultra-low interest rates will end sooner than what is expected.
All the traders are having their focus on Fed Chairman Ben Bernanke’s speech at the Economy Club of Washington at 12:45 p.m. EST (1745 GMT).
In New York during late morning trading, according to EBS via CQG, the euro was at $1.4828 from $1.4847 late Friday.
On Friday as investors waited for the U.S. government’s monthly employment report to offer clues to the potential pace of tightening in U.S. monetary policy so, the dollar was slow versus a basket of major currencies.
In November the U.S. economy lost 130,000 jobs, as compared to 190,000 in October, while the November unemployment rate was unchanged at 10.2%. [source : Reuters economist poll]
However traders were uncertain after it has been said by White House spokesman Robert Gibbs on Thursday that it has been signaled by Wednesday’s ADP private sector payroll report that the November unemployment level may tick up.
Meanwhile, after that Canadian jobs figures for November came in far stronger than expected, the Canadian dollar, jumped to a session high.
After that The European Central Bank President Jean-Claude Trichet expressed support for a strong dollar and as he announced small steps toward the withdrawal of extraordinary liquidity measures, the dollar recovered from near 16-month lows against the euro.
It has been said by Trichet that the euro zone had a “very important stake” in a strong dollar. Euro zone officials have show their concerns about gains for the euro, as it recently hit a 16-month high against the greenback. U.S. trade partners are not willing to see a too rapid depreciation of the US dollar as a cheap dollar affects their exports to the U.S. and endangers economic recovery.
According to EBS via CQG, in morning trading, the euro was recorded at $1.5077 from $1.5045 late Wednesday.
On Wednesday after worse-than-expected U.S. private-sector jobs data boosted safe-haven demand, the dollar rose, whereas the yen fell broadly on fears monetary authorities may step in to stem the currency’s strength.
A drop in the euro has been seen by the traders which is ahead of a policy meeting on Thursday of the European Central Bank. In which it is expected to announce the details of how and when it will remove generous liquidity from the system, and could upgrade its economic growth forecasts.
Reducing fears over Dubai’s debt problems weighed on the safe-haven dollar, but much support has been offered by talk of Asian central bank buying and the greenback’s gains versus the yen.
As positive euro-zone economic data, easing concern over the Dubai debt crisis and rising global equities helped swing investor sentiment in favor of riskier assets so the dollar declined against the euro on Tuesday.
A surprise overnight meeting of the Bank of Japan helped the dollar capture some ground against the yen, but still the greenback hovered around Y87. This is close to its yearly lows against the Japanese unit.
On Monday morning in New York the dollar recovered some of its earlier losses as investors continue to fret over Dubai’s debt crisis despite of the United Arab Emirates’ move of providing funds to local banks.
On the day the U.S. currency remains down against most major rivals, while safe-haven buying has once again provided support to the greenback.
As weaker equity prices tend to erode demand for riskier assets, including the euro and other higher-yielding currencies, there are possibilities that the greenback will take further cues from U.S. stocks.
According to EBS via CQG, in Monday morning trading, the euro was trading at $1.5010, as compared to $1.4955 late Friday.
On Friday the yen hit a 14-year high against the dollar and it rallied broadly, while the dollar climbed against most other currencies as carry trades and risk exposure were cut down by the investors on concern about Dubai’s debt problems.
However, by mid-session in London, exchange rates had recovered some ground and they were trading in narrower ranges, whereas volatility had eased.
It has been said by the market sources that the Bank of Japan checked exchange rates earlier in Asian trading with Japanese commercial banks. It has raised fears of outright intervention, although it has been said by the analysts that it has less probability right now.
Before pulling back up to 86.50 yen at 1200 GMT, the dollar dropped down as far as 84.82 yen JPY=, which is its weakest since 1995 and it is ever closer to its record low of 79.75.
On Thursday the dollar is still rising after midday in Europe. There are currently two factors that are driving this rise in dollar. One is the fear of a debt default by Dubai World and the other is talk of intervention by the Bank of Japan and suspected intervention by the Swiss National Bank.
This has reversed the dollar’s recent sharp fall which took it down to a 14-year low against the yen during Asian trading as investors continued to worry about how long U.S. interest rates will stay at low levels.
The dollar had shown a drop also due to the reports that Russia is planning to diversify some of its foreign exchange reserves into the Canadian dollar.
As the decline in weekly jobless claims and a rise in personal consumption improved the outlook for the U.S. economy, the dollar fell to a fresh 15-month low against a basket of currencies on Wednesday.
Traders had earlier sold the dollar across the board, which results in pushing the dollar to a 10-month low against the yen, as it has been showed by Federal Reserve minutes released on Tuesday that policymakers saw the U.S. currency’s recent decline as “orderly”.
