Dollar Index Erases Advance on Bets Fed to Maintain Stimulus
The Dollar Index (DXY) erased gains amid speculation the Federal Reserve won’t slacken stimulus even after U.S. nonfarm payrolls rose more than forecast in April.
The gauge, which Intercontinental Exchange Inc. uses to track the greenback versus currencies of six major U.S. trade partners, reached a one-week high after America’s unemployment rate fell to the lowest in four years. The Federal Open Market Committee maintained its commitment this week to buying assets under the quantitative-easing stimulus strategy until there’s significant improvement in the labor market.
“Nonfarm was strong, but not strong enough to bring in expectations of QE tapering,” Camilla Sutton, head of currency strategy at Bank of Nova Scotia, said by telephone from Toronto. “It’s a strong enough report, but it’s not strong enough to shift the expectations of the FOMC.”
The Dollar Index fell 0.2 percent to 82.075 at 10 a.m. in New York after reaching 82.517, the highest since April 26. It climbed yesterday as much as 1.1 percent, the most since April 17, after dropping on May 1 to a two-month low of 81.331. The gauge has lost 0.4 percent this week.
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