Dollar Hovers At 15-Month Lows Ahead Of NFP Report

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Includes: UDN, USDU, UUP
by: Investing.com

The dollar was hovering at 15-month lows against other major currencies on Friday, as the previous session’s downbeat U.S. service sector data continued to weigh and as investors awaited the release of a key U.S. employment report due later in the day.

EUR/USD edged up 0.12% to 1.1884, close to Wednesday’s 32-month peak of 1.1911.

The greenback remained under pressure after the Institute for Supply Management on Thursday said its index of non-manufacturing activity fell to 53.9 from 57.4 in June. Economists had forecast a reading of 57.0.

A separate report showed that U.S. initial jobless claims decreased by 5,000 to 240,000 last week, compared to expectations for a 3,000 fall to 242,000.

Investors were now looking ahead to the nonfarm payrolls report for July, due later Friday, to gauge whether the U.S. economy is strong enough for the Fed to stick to its planned tightening path.

The greenback has been under pressure recently amid worries over political turmoil in Washington and recent lackluster economic reports, which have raised doubts over whether the Federal Reserve will raise rates again this year.

GBP/USD held steady at 1.3140, recovering from sharp losses posted on Thursday after the Bank of England left interest rates on hold at record lows and cut its economic growth forecast for this year and next.

The dollar managed mild gains against the yen, with USD/JPY up 0.08% at 110.12.

Meanwhile, AUD/USD rose 0.28% to trade at 0.7970 after the Australian Bureau of Statistics said retail sales increased by 0.3% in June, beating expectations for an uptick of 0.2%.

The Aussie’s gains were expected to remain limited, however, as the Reserve Bank of Australia cut growth forecasts to 2.5% from 3.0% for 2017, saying that the recent appreciation of the nation’s currency has had a “modest dampening effect” on the outlook.

The comments came after RBA Governor Philip Lowe warned on Tuesday that the rising Australian dollar had become a threat to growth, inflation and employment.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 92.67, just off Wednesday’s 15-month low of 92.39.

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