Dollar Falls Most Since April as Traders Look to May Jobs Databy
The dollar fell by the most in four weeks Wednesday on concern that U.S. economic figures in coming days will dent prospects for an interest-rate increase by the Federal Reserve as soon as this month.
The greenback dropped against most major peers in New York on the view that the latest economic readings, including consumer confidence Tuesday, weren’t strong enough for the central bank to justify tightening monetary policy again, after liftoff from near zero in December. The U.S. currency also fell against the yen Wednesday after Japanese Prime Minister Shinzo Abe told lawmakers in Tokyo he would postpone an increase in the nation’s sales tax.
Fed officials meet June 14-15 to discuss policy, after Chair Janet Yellen said last week that a rate increase would be probably be “appropriate” in coming months. The next major hurdle in terms of economic data comes June 3, with the release of payroll data for May. The consensus among analysts is that the economy added fewer than 200,000 jobs for a second straight month.
“The dollar’s been under a little bit of pressure” since the soft batch of data, said Omer Esiner, chief market analyst in Washington at Commonwealth Foreign Exchange Inc. “It raised some questions about whether the Fed would be able to raise rates.”
The Bloomberg Dollar Spot Index, which tracks the currency against 10 peers, was little changed as of 7:55 a.m. in Tokyo from Wednesday, when it fell 0.43 percent, its biggest loss since April 29. The dollar was steady at $1.1185 per euro and 109.55 yen, after sliding 0.5 percent and 1.1 percent against the currencies Wednesday, respectively.
“Investors are a little wary to add significantly to any dollar positions” before the employment report, Esiner said.