Print

Mail

wiki links

Greenback suffers significant losses against major rivals

The US dollar suffered sharp losses on Friday in the wake of the US February payrolls report, with the greenback surrendering its gains from earlier in the week.

The latest bout of selling extended the single currency's gains through key technical levels, which forced additional euro buying as traders moved to stop losses on dollar-heavy positions. The euro broke technical resistance at US$1.3225, but the next key level at US$1.3240 wasn't decisively breached.

The dollar had rallied earlier this week in anticipation of the jobs number, and its decline on Friday likely meant that dollar-buying was overdone. Overnight the dollar hugged a tight range versus most major competitors as traders held back from taking new bets ahead of the payrolls number.

Late afternoon, the euro was at US$1.3238 from US$1.3115 before the data and US$1.3109 late Thursday. The dollar was at ¥104.75 from ¥105.43 before the data and at 1.1695 Swiss francs from SF1.1806. The British pound rose to US$1.9238 from US$1.9080 late Thursday.

The dollar selloff came immediately after the early morning release of the jobs report, which beat consensus expectations but failed to live up to more optimistic forecasts in the marketplace.

Non-farm payrolls grew by 262,000 last month after a downwardly revised 132,000 increase in January, the US Labor Department said. That compares with market expectations for 220,000 new jobs.

The news caused a bond market rally, which brought Treasury yields lower and put pressure on the dollar, as hopes were dashed that strength in the data might cause Federal Reserve policy makers to up the pace of interest rate hikes.

"The only way this can be explained is that there had been significant long dollar positioning in anticipation of a much higher number, and it didn't really materialize," said Ashraf Laidi, chief currency strategist at MG Financial.

Despite the dollar's post-payrolls fall, the US currency is still in the ranges where it has traded in recent weeks. But the dollar's decline is putting it within striking distance of testing the lower end of the range, which would come as the euro approaches last week's high of US$1.3274.

High-yielding currencies have fared best from the post-payrolls dollar selloff. The Australian dollar was at US$0.7907 late Friday from around US$0.7830 before payrolls and the New Zealand dollar traded at US$0.7325 from US$0.7270 before the data.
This story has been viewed 1959 times.