It would take a blow-out jobs report next week to get the US dollar to move out of its slump.
The greenback fell for a second week as foreign-exchange managers search for clues about the strength of the economy and the US Federal Reserve’s next policy move. The employment data, to be released on Friday next week, might shift market-based expectations for the central bank to raise interest rates this year. On Friday, they showed a 17 percent probability of a rate hike when the central bank meets next month and 59 percent for a move by December.
The US currency has fallen 4 percent this year as traders anticipate the central bank will be slow to raise rates amid uneven economic data. Yet the Fed indicated this month it remains data-dependent, it is pleased with the progress of the economy and that every policy meeting is “live” for a rate hike, setting up the potential for US dollar appreciation.
“Strong data puts November on the table,” said Mark McCormick, North American head of foreign-exchange strategy at Toronto-Dominion Bank. “The data feeds into the Fed view — anything above 150,000 keeps December live and could support the US dollar against the majors.”
Toronto-Dominion expects the US dollar to strengthen to US$1.04 per euro by the end of the year from about US$1.12 on Friday.
The Bloomberg Dollar Spot Index, which tracks the US currency against 10 of its major peers, fell 0.3 percent this week. It declined 0.4 percent last month and dropped 0.2 percent in the third quarter.
In Taipei, the US dollar closed higher against the New Taiwan dollar, gaining NT$0.010 to NT$31.366 on Friday. That compares with its closing of NT$31.33 a week earlier.
The pound climbed for the first time in three days versus the euro as UK growth figures beat economists’ forecasts and Europe’s single currency was hurt by the mounting furor over Deutsche Bank.
Sterling rose against most of its G10 peers and had its first weekly gain versus the euro in a month after data showed increased consumer spending and business investment helped offset the economic effects of a growing trade deficit.
Still, the gains may be short-lived as traders’ attention now turns to purchasing managers’ surveys for manufacturing, construction and services next week, which analysts see slowing down last month.
The pound climbed 0.2 percent to ￡0.8634 per euro as of 4:30pm in London, leaving it 0.3 percent stronger in the week. Sterling rose 0.4 percent to US$1.3013.
In Manila, the Philippine peso completed its biggest monthly decline since October 2000 amid the biggest outflow from the nation’s stocks in a year.
The investor exodus prompted by Philippine President Rodrigo Duterte’s expletive-laden outbursts has pushed the currency to a seven-year low and made it Asia’s worst performer last month. Duterte has lashed out at US President Barack Obama and told off both the EU and the UN for their criticisms of his violent anti-drug campaign, which has left more than 3,000 people dead.
The peso fell 0.3 percent on Friday and 3.9 percent last month to 48.50 pesos per US dollar, its weakest close since September 2009, data from the Bankers Association of the Philippines showed.
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