Forex

Dollar still steady against peers following the news that Fed will go on with its plans

US Dollar increase

The dollar remained firm against a basket of currencies on Monday following the release of non-farm payrolls in the stateside, which jumped more than expected. This also shows that the U.S. Federal Reserve will still tighten monetary policy this 2017.

The index which tracks the value of the greenback against its major opposing currencies, the U.S. dollar index, was solid at 96.012 on the day. The Japanese yen was outperformed by a much stronger dollar as it was 0.2 percent up at 114.16 yen. It reached its highest level since May 9 at 114.21.

The employment growth in United States for the month of June came in better than expected and employers have increased hours for their employees. This movement shows that the Federal Reserve will start to diminish its immense balance sheet regardless of tepid inflation and stagnant salary gains. It also suggested that they will go on to inciting an interest rate hike sooner this 2017.

Chief foreign exchange strategist in Tokyo Daiwa Securities Mitsuo Imaizumi said that the strong numbers shown on the jobs data gives the market a reason to expect that the Federal Reserve is to announce that it will begin to cut its immense balance sheet. He added that the Bank of Japan is too far from a policy exit and the little steps it had been taking are gradually weakening the yen.

This week, analysts have reduced their net long bets on the dollar to their lowest since May 2016. The value of the greenback’s net long positions declined as much as $135 million from last week’s $4.5 billion, Reuter’s calculated.

Please follow and like us:

Leave a Reply

Your email address will not be published. Required fields are marked *