Forex - Dollar Slides to 10-Day Low Ahead of Payroll Data
Updated: Nov 4, 2019
The dollar fell to its lowest in some 10 days in early trading in Europe amid hopes that the world economy may be bottoming out.
Those hopes rested largely on a Chinese business survey by Caixin/IHS Markit, which showed the strongest improvement in operating conditions for Chinese manufacturers since February 2017. Output and new orders both expanded at steeper rates, with the latter supported by a renewed increase in export business.
That contrasted sharply with a more gloomy reading from the state-compiled PMI earlier in the week, which showed continued weakness.
Other purchasing manager indexes from around Asia showed the world’s manufacturing continuing to struggle, with Indonesia’s falling to a four-year low, Taiwan’s slipping into contraction territory and South Korea’s staying in negative territory despite a modest increase.
Among European currencies, EUR/USD and GBP/USD both benefited from dollar weakness ahead of what is expected to be a complicated set of U.S. labor market numbers at 8:30 AM ET. The headline nonfarm payrolls growth number is expected to fall to 89,000, due largely to the impact of the strike at General Motors (NYSE:GM). That will put more focus than usual on wage developments, where average hourly earnings and hours worked are expected to stay unchanged from September.
By 4:30 AM ET, the dollar index, which tracks the dollar against a basket of developed market currencies, was down 0.1% at 97.037, on course for a 0.6% drop on the week. Sterling was up 0.2% at $1.2966 while EUR/USD was up 0.1% at $1.1157.
"In the coming weeks however, with a majority (election) win for the Conservatives priced in and less room for a short-squeezing effect, the upside for sterling appears quite limited," analysts at ING said in a morning note. All source and contents are from investing.com