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Dollar nurses losses as traders await more data to determine direction
The euro held gains versus the dollar but faces a test later on Monday with data that is expected to show German industrial output growth slowed at the end of last year.
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Money matters: An employee counts US dollar banknotes in a money changer in Jakarta. Bank Indonesia has decided to strengthen the Jakarta Interbank Spot Dollar Rate, a policy that will take effect on April 5. (Antara/Rivan Awal Lingga)
T
he dollar nursed losses against most currencies in subdued trade on Monday as disappointing US jobs data caused some investors to scale back bets on a rebound in the greenback.
The euro held gains versus the dollar but faces a test later on Monday with data that is expected to show German industrial output growth slowed at the end of last year.
Speculators have been reducing short positions in the dollar, but some analysts say better US economic data and continued progress in fighting the COVID-19 pandemic will be needed for further dollar gains.
"Soft non-farm payrolls has really pulled the ladder out from under the dollar," said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities.
"Now the markets are questioning whether the dollar can rise any further. A lot depends on the coronavirus, but we also need to know when US fiscal stimulus will pass."
Against the euro, the dollar traded at $1.2034 after a 0.7 percent slump on Friday.
The British pound bought $1.3726, close to an almost three-year high.
The dollar was quoted at 105.49 yen, having pulled back from a three-month high reached on Friday.
The US economy created fewer jobs than expected in January while job losses the previous month were deeper than initially reported, data at the end of last week showed.
The release of US consumer prices and consumer sentiment later this week will help determine whether a recent rise in inflation expectations and Treasury yields was justified.
Any disappointing numbers from either report could knock the dollar lower, some analysts said.
The dollar index against a basket of six major currencies stood at 91.117, after falling 0.6 percent on Friday.
Speculators' net bearish bets on the dollar fell to $29.95 billion for the week ended Feb. 2, compared with a net short position of $33.81 billion for the previous week, according to calculations by Reuters and US Commodity Futures Trading Commission data.
