Dollar Rally Revives as Investors Look Beyond Dip in U.S. Jobs

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The dollar is showing signs of revitalization as traders look through last week’s weaker-than-forecast U.S. jobs report and rebuild positions.

A gauge of the greenback is on track for its first weekly advance since dropping from a more-than-decade high in the middle of March. The currency slumped on April 3 when data showed employers added the fewest jobs since December 2013. The yen was near a two-week low against the dollar as the Bank of Japan concludes a two-day policy meeting on Wednesday, before the Federal Reserve publishes minutes of its March gathering.

“The market is inclined to give the jobs market a pass, given its outperformance over the better part of the last year,” said Joe Manimbo, an analyst at Western Union Business Solutions, a unit of Western Union Co. in Washington. “The dollar has entered more of a consolidation phase and I think it’s really searching for that next catalyst.”

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, was little changed at 1,191.98 as of 12:12 p.m. in Tokyo after rising 0.9 percent during the previous two days. The gauge closed at 1,222.12 on March 13, the highest in data going back to 2004.

The dollar fell 0.1 percent to 120.17 yen after appreciating to 120.45 on Tuesday, the strongest since March 20. The U.S. currency slipped 0.2 percent to $1.0831 per euro.

Still Optimistic

Bloomberg’s dollar gauge slumped 0.7 on April 3 when the Labor Department said U.S. employers added 126,000 workers in March, snapping 12 straight months of gains over 200,000, the longest such stretch since 1995. The median forecast in the Bloomberg survey was for an addition of 245,000.

Even with the softer jobs numbers, employment opportunities are underpinning optimism, laying the groundwork for a rebound in spending. U.S. job openings increased in February, a report showed Tuesday.

The Fed is considering when to raise interest rates after holding them close to zero since 2008. Minutes of the March 17-18 to be published today may provide more clarity on their thinking, after officials removed a commitment to being “patient” on rate increases.

“There was a little bit of position cleansing and I think that now the market seems to be a little bit more willing to buy dollars,” Daniel Tenengauzer, head of emerging-market and global foreign-exchange strategy at Royal Bank of Canada’s RBC Capital Markets unit, said by phone from New York. “We still have the Fed hiking in June, but we have a conditionality on that, which is data improvement. We do believe that there will be an improvement in data going forward.”

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