Forex – Dollar Stabilizes Ahead of Fed Meeting

© Reuters.

By Peter Nurse – The dollar has stabilized in early European trade Friday, following Friday’s shock rise in U.S. employment and ahead of the latest meeting of the Federal Reserve.

At 3:05 AM ET (0705 GMT), the , which tracks the greenback against a basket of six other currencies, was largely flat at 96.888, having dropped nearly 3% over the last month. dropped 0.1% to 109.48.

Underpinning the dollar was a surprising recovery in in May after the economy suffered record job losses in April, data showed on Friday.

Thealso fell to 13.3% last month from a post-World War Two high of 14.7% in April, offering hope that the world’s largest economy is starting to stabilise after the pandemic triggered a wave of job cuts.

That said, investors may avoid making big trades before the ends on Wednesday. 

traded at 1.1294, up 0.1%, just off its strongest level in almost three months, after German slumped 17.9% in April, a record hit, before a gradual easing of lockdown restrictions set off an ever-so-slow recovery.

The euro had been boosted by the European Central Bank’s move Thursday to increase its emergency bond purchase scheme to 1.35 trillion euros, more than had been expected.

Sterling has also continued to push higher Monday, with up 0.2%, at 1.2685, having earlier climbed above 1.27 for the first time since early March.

Still, further gains for the pound may be hard won, after the fourth round of EU-UK future relationship negotiations concluded Friday with no major breakthroughs. 

“We are still of the belief that it is too early for the two sides to reach an agreement, and hence we still expect investors to reprice the no-deal Brexit risk premium soon,”said analysts at Danske Bank, in a research note.



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Source: Forex – Dollar Stabilizes Ahead of Fed Meeting

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