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Dollar Up, but Falls Below Year High as Investors Await U.S. Jobs Data By


© Reuters.

By Gina Lee – The dollar was up on Tuesday morning in Asia, but as investors await the latest U.S. jobs report for clues on the U.S. Federal Reserve’s timing to begin asset tapering and hike interest rate hikes.

By 10:28 ET (2:00 GMT), the that monitors the greenback against other currencies edged up 0.17 to 93.942

This pair increased by 0.18% to 111.06

Both the pair declined 0.18% to 0.7271, and fell 0.24 percent to 0.6945. Later in the day, the policy decision will be handed down by the ECB. The following day it will follow. It will also hand down its policy decision Friday.

While the Chinese markets were closed, the pair held steady at 6.4467. However, the pair dropped 0.13% from 1.3596 to 1.3596.

The dollar fell slightly following its 94.504 peak, its highest since September 2020. It had rallied as much as 2.8% since Sep. 3, with investors pricing in the Fed’s asset tapering that could begin as soon as November 2021 and potential interest rate hikes in 2022.

Global stagflation fears and U.S. debt ceiling debates have also increased the greenback as a safe-haven currency.

There is a lot negative global news that has been priced in to the dollar. “The key to markets’ success in the next weeks is to identify the level of the risk premium currently priced in versus how those factors will play out,” Mark McCormick from TD Securities, Global Head of FX Strategy (NYSE:), stated in a recent report.

The report stated that “while the near-term dollar bias is higher, we are wary of chasing the movement at these levels.”

On Friday, the U.S. jobs data, which also includes, will be available. The report is expected to continue showing improvement in the labor markets. It is expected that the Fed will be able to start asset tapering in 2021, as it had planned.

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