Reuters
Published Aug 03, 2022 09:39PM ET
Updated Aug 04, 2022 04:36PM ET
By Lananh Nguyen
NEW YORK (Reuters) - The dollar weakened against most major currencies on Thursday as support from the Federal Reserve's hawkish messaging subsided and investors turned their attention to a hotly anticipated U.S. jobs report.
The dollar extended losses following U.S. data that showed the number of Americans filing new claims for unemployment benefits increased last week.
Earlier on Thursday, the Bank of England raised interest rates by the most since 1995. The British pound initially weakened as the central bank warned that a long recession was on its way with inflation seeing topping 13% but it later gained some ground as the dollar fell.
The dollar index fell 0.704% to 105.720, while sterling was last trading at $1.2166, up 0.19% on the day. The euro was up 0.79% at $1.0244, and the Japanese yen strengthened 0.76% versus the greenback at 132.83 per dollar.
"There is a mentality now across markets that we know what’s coming in terms of monetary tightening," said Juan Perez, director of trading at Monex USA in Washington. Investors are taking a view that "whatever downturn we're facing in the next few months will be short-lived."
Investors will get a key snapshot of how the U.S. economy is faring on Friday, when the Labor Department reports employment data for July. Signs that the U.S. job market continues to be robust will likely bolster expectations for more monetary policy tightening from the Fed.
Fed officials have continued to push back against the perception that U.S. interest rates were close to peaking. On Thursday, Cleveland Fed President Loretta Mester said the Fed should raise interest rates to above 4% to help bring inflation down and aim to keep tightening through the first half of next year.
Her comments followed those by San Francisco Fed President Mary Daly and Minneapolis Fed President Neel Kashkari who voiced their determination overnight to rein in high inflation.
The dollar's strength has yet to peak, a Reuters poll released on Thursday showed. Of those polled, 70% thought the dollar had some room to rise further in this cycle, even after its index hit its highest level in two decades in July.
Money markets price in a 50 basis-point hike at the Fed's September meeting, and a roughly 44% chance of another massive 75 bps increase. The Fed hiked rates by 75 basis points at its meeting in June and July. [FEDWATCH]
Currency bid prices at 4:28PM (2028 GMT)
(The story corrects YTD pct change values in table.)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 105.7400 106.4800 -0.68% 10.534% +106.5100 +105.6600
Euro/Dollar $1.0244 $1.0167 +0.76% -9.89% +$1.0254 +$1.0154
Dollar/Yen 132.9450 133.8500 -0.66% +15.50% +134.4150 +132.7700
Euro/Yen 136.20 136.08 +0.09% +4.51% +136.9200 +135.6500
Dollar/Swiss 0.9552 0.9604 -0.57% +4.69% +0.9622 +0.9545
Sterling/Dollar $1.2164 $1.2148 +0.13% -10.06% +$1.2196 +$1.2065
Dollar/Canadian 1.2864 1.2842 +0.18% +1.75% +1.2876 +1.2819
Aussie/Dollar $0.6969 $0.6952 +0.22% -4.15% +$0.6990 +$0.6936
Euro/Swiss 0.9784 0.9764 +0.20% -5.64% +0.9797 +0.9762
Euro/Sterling 0.8419 0.8368 +0.61% +0.23% +0.8437 +0.8358
NZ $0.6299 $0.6277 +0.34% -7.98% +$0.6315 +$0.6267
Dollar/Dollar
Dollar/Norway 9.7275 9.7130 +0.15% +10.42% +9.7680 +9.6890
Euro/Norway 9.9656 9.8747 +0.92% -0.47% +9.9750 +9.8665
Dollar/Sweden 10.1085 10.2127 -0.21% +12.09% +10.2256 +10.1050
Euro/Sweden 10.3558 10.3776 -0.21% +1.19% +10.3910 +10.3523
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.