You are here
Dollar drops on eve of US jobs report
[NEW YORK] The dollar fell against the euro for a second straight day Thursday in cautious trade on the eve of the US March jobs report and a long Easter holiday weekend.
The euro surged to US$1.0879 around 2100 GMT, from US$1.0760 late Wednesday.
The greenback's weakness is "a bit counter-intuitive, because good data are coming out of the United States," including a drop in jobless claims and a rebound in factory orders, both unexpected, said Vassili Serebriakov of BNP Paribas.
But most of all, he said, traders were "taking up their positions in view of tomorrow's report on employment in the United States. Some were trimming their dollar holdings "in case the numbers are disappointing."
The report is expected to show the economy added a strong 250,000 jobs last month, compared with 288,000 in February, while the jobless rate remained unchanged at 5.5 per cent.
Kathy Lien of BK Asset Management said that the jobs report was particularly important for the forex market because the dollar has pulled back and investors are divided on when the Federal Reserve will raise ultra-low interest rates.
"If the labour market report is strong, it will harden the case for a summer rate hike and revive the rally in the US dollar," she said.
"However if job growth falls short of expectations, the dollar could extend it slide against most of the major currencies."