Dollar plunges below year-long high as wage test nears

Texas News Today

File photo: Taken on May 26, 2020, you can see the US dollar bills in this figure. Reuters / Dadoruvik / Illustrations / File Photo

5 October 2021

Kevin Buckland

TOKYO – Tuesday’s US dollar will ease the Federal Reserve stimulus and raise interest rates.

The Australian dollar continued to rise for three days, with trading unchanged from the day before hitting its four-day high of $0.72905 at 0.73045. The Reserve Bank of Australia met on Tuesday and economists polled by Reuters unanimously predicted that the policy rate would not change.

The New Zealand dollar held near a four-day high of $0.6981 in the previous session and traded at $0.6960 after three days of gains. When the country’s central bank decides on policy on Wednesday, the market price will be in for a quarter-point rate hike.

The US dollar index, which measures currencies against six rivals, was nearly flat at 93.845, slightly lower than Thursday’s peak of 94.504, the highest level since the end of September 2020.

It has continued to rise up to 2.8% since September 3 as traders slash prices next month and interest rates may go up next year. US debt cap deadlocked for deadlock.

Mark McCormick, Global Head of FX Strategy at TD Securities, said in the report: “The key to the market in the coming weeks is to categorize the extent of the risk premium that is already on price and how these factors work.”

“Short-term US dollar bias is more skewed, but we are wary of pursuing movements at these levels,” McCormick said.

Non-farm payrolls data on Friday showed a steady improvement in the labor market, with an additional 488,000 jobs expected in September, according to a Reuters poll.

Elsewhere, the Canadian dollar was trading near C$1.258, down nearly 0.1% on Monday against a near monthly high per greenback, supported by a recovery in crude oil to a three-year peak. Then it became C $1.2599.

Sterling is near a four-day high at $1.3640, with the last change happening at $1.3605.

(Reporting by Kevin Buckland; Edited by Mr. Navaratnam)

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