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Dollar nursing losses after jobs data mars recovery narrative
The greenback continued to buck its traditional role as a safe-harbour currency, falling in sympathy with US stocks overnight after an unexpected increase in weekly jobless claims soured the economic outlook.
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Vials with a sticker reading, (REUTERS/Dado Ruvic/Illustration)
T
he US dollar maintained its biggest loss in 10 days on Friday after disappointing US labour market data bruised optimism for the country's speedy recovery from the COVID-19 pandemic.
The greenback continued to buck its traditional role as a safe-harbour currency, falling in sympathy with US stocks overnight after an unexpected increase in weekly jobless claims soured the economic outlook.
The British pound traded near an almost three-year high reached overnight, when it surged the most in more than a month, amid Britain's aggressive vaccination program.
The dollar index was little changed at 90.584 early in the Asian session, after a 0.4 percent decline overnight cut short a two-day winning streak. For the week, the gauge is now back to more or less break-even.
The string of soft labour data is weighing on the dollar even as other indicators have shown resilience, and as President Joe Biden's pandemic relief efforts take shape, including a proposed $1.9 trillion spending package.
"The prospect of a massive US fiscal stimulus plus a successful vaccine roll-out are solid arguments to bet on a US recovery this year," Rodrigo Catril, senior foreign exchange strategist at National Australia Bank in Sydney, wrote in a client note.
"But the overnight jobless claims data serve as a reminder of the unevenness of the recovery so far."
Sterling was mostly flat at $1.3965 on Friday following a 0.8 percent jump in the previous session, when it rose as high as $1.3986 for the first time since April 2018.
The euro was little changed at $1.2089 after rising 0.4 percent overnight.
The dollar bought 105.695 yen, little changed following a two-day retreat from the five-month high of 106.225 reached Wednesday.
In cryptocurrencies, bitcoin continued to hover around $51,500, consolidating after hitting a record $52,640 on Wednesday in a rally fuelled by endorsements from Tesla Inc and others. It has risen about 78 percent so far in 2021, after more than quadrupling last year.
Smaller rival ethereum rose to a record $1,951.89 on Friday, just pipping the previous day's high. It has surged some 162 percent this year.
On Thursday, chipmaker Nvidia Corp announced a new processor designed specifically for mining ethereum.
