The dollar inched lower against the yen and euro on Monday in volatile trading, pressured by weakness in US stocks as the currency's positive outlook was somewhat diminished by surprisingly weak US wage data on Friday. Friday's wage numbers cast doubt on a key driver of the US currency's ascent over the past six months. And some market participants have asked why the Federal Reserve should raise interest rates this year in the absence of clear evidence of inflationary pressures.
"A little air seeped out of the dollar rally last week after weak US wages splashed some cold water on prospects for a Fed rate hike by midyear," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. In midmorning New York trading, the dollar was down 0.2 percent against the yen at 118.31 after hitting a one-week low of 118.11 yen.
The euro, meanwhile, edged lower against the dollar at $1.1826, but it was off a nine-year trough of $1.1753 plumbed on Thursday. The Canadian dollar, meanwhile, hit a fresh 5-1/2 year low against the greenback as oil prices continued to weaken, pushing the currency towards a key psychological support level at C$1.20 to the US dollar.
The greenback was last at C$1.1908, up 0.3 percent.
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