Dollar Weakens Ahead of Fed Minutes and Other Top Forex News.
The dollar was mostly softer against the other major currencies on Monday ahead of Wednesday’s Federal Reserve meeting minutes, while comments by European Central Bank officials dampened expectations for unconventional monetary easing measures boosted the euro.
Investors are anxiously awaiting this weeks minutes after last Friday’s jobs data raised questions about the strength of the U.S. economic recovery. The U.S. created 192,000 jobs in March, slightly below expectations of 200,000.
Weak sentiment caused the dollar to soften against most of the major currencies, with the Japanese yen benefitting the most. USD/JPY touched a session low of 103.00, the weakest level since March 31 as investors remain wary ahead of the outcome of the Bank of Japan’s two-day policy meeting on Tuesday, checking the dollar’s recent gains against the yen.
USD/JPY closed the session down 0.16% to 103.11.
Meanwhile, the euro received a boost after ECB policymaker Yves Mersch told reporters that while the central bank was working on plans for large-scale asset purchases to drive up inflation in the euro zone, the program is not required yet.
Separately, Bundesbank president Jens Weidmann said that monetary policy cannot solve the financial crisis, and urged euro zone political leaders to keep reforming their economies.
The news comes after ECB President Mario Draghi said last week that unconventional monetary policy instruments may be necessary to avert the risk of ongoing low inflation becoming entrenched in the euro zone.
EUR/USD ended the session up 0.27% to 1.3740, down from a high of 1.3746.
The pound was also in positive territory against the dollar in light trade, as demand for the greenback remained under pressure after the release of last week’s disappointing U.S. nonfarm payrolls data.
GBP/USD ended the session up 0.18% at 1.6605.
Elsewhere, the Australian dollar fell back from its highest level in four months against the dollar but remains above the key 92 cents level. The currency softened slightly earlier after traders cut their bearish bets to the lowest amount seen in almost a year.
AUD/USD ended the session down 0.25% at 0.9268, retreating from a four-and-a-half month high of 0.9306 touched on Friday.
The New Zealand dollar was also marginally softer with little news to support it, NZD/USD traded in tight ranges for most of the session, closing up 0.08% at 0.8607.
Finally, the Canadian dollar made small gains after a Bank of Canada survey delivered positive signs for the domestic economy. The quarterly survey of 100 firms showed that hiring intentions last month were among the most positive in almost two years as higher sales and better prospects keep companies motivated.
USD/CAD moved down 0.10% to 1.0970 following the release.
More coverage of today’s session.
- Marc Chandler: ECB Speak: A translation. – There is a battle within the European Central Bank. Some want to take stronger action. Others do not think it is necessary. It is not just a matter of counting up who is on what side of the issue. It is not simply about majority rules. The ECB seeks consensus.
- WSJ: Euro Zone countries can’t backtrack on reform. – Euro-zone countries must maintain their efforts to reduce budget deficits and reform their economies and governance structures despite “reform fatigue” in parts of the currency bloc, Germany’s central bank chief Jens Weidmann said Monday.
More Top Stories:
FT: China takes slow boat to currency liberalisation. – The global debate over the potential for liberalisation of the Chinese renminbi is, to say the least, polarised. At one extreme are enthusiasts who think it inevitable and will occur in a relatively short timeframe, while on the other hand an array of sceptics says full international convertibility of the renminbi will never happen.
New Zealand Herald: NZ dollar gains after US jobs data disappoints. – The New Zealand dollar popped above 86 US cents at the weekend after a key US jobs report failed to meet the expectations of some investors, spurring demand for higher-yielding currencies.
FCF: AUD/USD remains close to four-month high. – In Monday’s session the Aussie retreated slightly but remains above the 92 cents level. The currency softened slightly earlier after traders cut their bearish bets to the lowest amount seen in almost a year.
Calgary Herald: Canadian dollar inches higher after Bank of Canada’s business outlook survey. – The Canadian dollar made small gains on Monday after a Bank of Canada survey delivered positive signs for the domestic economy.
Cliff Wachtel: EUR/USD weekly outlook: At short, long-term crossroads, and what will decide its fate. FX Traders’ weekly EUR/USD fundamental & technical picture, this week’s market drivers that could change it- the bullish, the bearish and likely EUR/USD direction short, medium, long term.
Daniels Trading: Gold futures ebb and flow as Fed falls under scrutiny. – Gold futures were slipping in value on Monday as speculation mounted about the status of economy-spurring stimulus measures with the U.S. Federal Reserve, according to Bloomberg.