FX Round-up: Dollar continues uptick against yen
The dollar corrected against a basket of global currencies on Monday, but continued to trade higher against the yen.
On Friday, a positive US jobs report increased the likelihood of an interest rate hike by the Federal Reserve as early as December, sending the greenback soaring against a basket of currencies.
US non-farm payrolls grew by 271,000 in October, according to the Bureau of Labor Statistics, well above the market consensus forecast for a gain of 180,000. The unemployment rate edged lower by a tenth of a percentage point to 5.0%, as the participation rate held steady at 62.4%.
At 1341 GMT, the dollar was up 0.29% against the yen exchanging at JPY123.49 extending Friday’s gain in European trading. However, the pound and euro rose 0.24% and 0.02% to exchange at $1.5089 and $1.0738 respectively. The greenback was also broadly flat against the Swiss franc, exchanging at CHF1.0054.
Kit Juckes, head of forex at Societe Generale, said, “The dollar will gain against emerging market currencies, but perhaps not dramatically. By the same token, unless the Chinese economy slows more sharply and/or the yuan weakens sharply, the gut-reaction sell-off in commodity prices shouldn't go too far either.
“Are strong US real wage gains really that bad for oil prices? All of this points to an orderly rise in the dollar, with a peak that comes, perhaps, when we have clarity about where fed Funds will peak and clarity about how much more easing there is to come from, inter alia, the ECB and BOJ.”
In line with broader forex market trends, the greenback registered gains of 0.39%, 0.74% and 0.31% against the Mexican peso, Brazilian real and Chilean Peso, changing hands at MXN$16.8725, BRL3.7967 and CLP701.75 respectively.
Afternoon European trading also saw the Australian dollar rise against its US counterpart by 0.14% changing hands at US$0.7053. Concurrently, the New Zealand dollar also rose 0.15% against the greenback changing hands at US$0.6534.