The dollar fell against a basket of currencies, retreating from last week’s year-long high, while traders looked at US employment data over the weekend for clues to the next move. From the Federal Reserve System. 

The US dollar currency index, which measures the dollar against a basket of six currencies, fell 0.2% to 93,802. The index rose 0.8% last week, reaching its highest level since the end of September 2020. 

Investor’s jobs attention was focused on future US data as the mainland China market closed due to national holidays until Thursday and the South Korean market closed on Monday.  “Nonfarm payrolls will be the big focus for markets this week,” Brad Bechtel, global head of FX at Jefferies in New York. 

According to a Reuters poll, Friday’s data show continued improvement in the labor market, with 488,000 jobs expected to be added in September, putting the Federal Reserve on track by the end of the year. The Federal Reserve Board has shown that it is likely to start cutting monthly mortgage purchases in November, but traders fear that major obstacles to labor data could delay plans. .. 

 “Will the Fed react negatively to a 300k print? Likely not. With the momentum on taper already really high, the Fed will have a hard time making an about-face after a small miss on what has been a very volatile series,” Bechtel said. 

 “If we were to see something more extreme like a negative NFP print, for example, then we could have a different story, and the Fed may be forced to at least pause,” he said. 

The dollar found little support in Monday’s data, with new orders for U.S. products in August, even though economic jobs growth appeared to slow in the third quarter due to a shortage of raw materials and labor. It shows that it has accelerated. However, forex market speculators have been increasingly optimistic against the US dollar in recent weeks, with long-term net bets on the US dollar rising to their highest levels since March 2020, data said on Friday.  

The dollar was particularly weak against the energy-sensitive Norwegian krone and the Canadian dollar, as oil prices were high for almost seven years. The dollar fell 0.6% against the krona and 0.5% against the Canadian dollar. The pound sterling rose 0.5% to $ 1.3611, expanding its retreat from last week’s nine-month low. 

 “We think the GBP is still on fragile footing since the country will likely still have energy and food shortages in the fourth quarter. This, combined with strong U.S. data this week, could see the GBP re-test the 1.34 zone and resume its September decline,” Shaun Osborne, chief currency strategist at Scotiabank, said. 

 Source: U.S News & World Report Money