Dollar Ends Three-Day Drop Ahead of US Payrolls
The dollar consolidated following three days of losses as traders awaited US jobs data to gauge the outlook for Federal Reserve policy easing. The yen fluctuated ahead of the US-Japan summit.
The Bloomberg Dollar Spot Index edged less than 0.1% higher after falling 0.9% over the past three sessions. Economists estimate non-farm payrolls increased 175,000 in January, while a whisper number among Bloomberg terminal users is 200,000.
The yen erased a gain as traders awaited Japanese Prime Minister Shigeru Ishiba's first meeting with President Donald Trump. Hedge funds have been involved in long yen trades this week following Japan's strong wage data and hawkish central bank commentary, according to traders.
“With tariff threats receding and US yields stabilizing well off their recent highs, immediate bullish impulses” for the dollar have faded, Richard Franulovich, head of foreign-exchange strategy at Westpac Banking Corp., wrote in a note. “January payrolls and CPI next week though might reignite some short-term upside”.
USD/JPY edged 0.2% higher to 151.70 after losing in the past four days.
The yen rallied 2.4% this week, its best performance since November, as faster-than-expected wage growth and hawkish comments from BOJ policy board member Naoki Tamura fueled speculation that the central bank may raise interest rates sooner than markets anticipated.
AUD/USD little changed at 0.6282.
EUR/USD edges less than 0.1% lower to 1.0378.
GBP/USD slips 0.1% to 1.2423.
Source: Bloomberg
