Dollar pares losses in New York on safe-haven buying due to fall in US equities
|Although the greenback resumed its recent losing streak and fell to a 2-1/2 month low due to recent release of downbeat U.S. economic data and as investors remained cautious ahead of Wednesday's inflation release, dollar rebounded in New York on safe-haven usd buying on weakness in U.S. stocks. (Dow ended at 34,269, down 473 points, or 1.36%)
Reuters reported Cleveland Federal Reserve Bank President Loretta Mester on Tuesday said she believes lack of access to childcare, school closures, and concerns about health risks are crimping labor supply and are the main causes of slower job gains last month. "It is true that with the extension of the unemployment benefits people are in a financial position so that they can make those hard choices, about whether they feel comfortable reentering or not," Mester told Yahoo Finance, but the benefits are themselves are not causing the problem. Still, she said, "we are still adding jobs, and I think the outlook is bright."
Versus the Japanese yen, although dollar gained to 108.98 at Asian open, renewed selling emerged and intra-day fall accelerated in European morning. Price then tumbled to session lows of 108.36 in New York morning on usd's weakness as well as cross-buying in jpy before rebounding to 108.68 near the close on short-covering and safe-haven usd buying due to fall in U.S. equities.
The single currency moved sideways in Asia and found renewed buying at 1.2124 in European morning. Price then rallied to a fresh 10-week high of 1.2181 in New York morning on usd's weakness before retreating to 1.2146 near the close on profit-taking as well as cross-selling in euro and safe-haven usd buying.
Although the British pound traded sideways in Asia, renewed buying interest emerged at 1.4105 in European morning and cable rallied to a fresh 10-week high of 1.4167 in New York afternoon on usd's weakness before retreating to 1.4139 due to profit-taking and recovery in the greenback.
Data to be released on Wednesday:
New Zealand retail sales, Australia Westpac consumer sentiment, Japan coincident index, leading indicator, Germany CPI, HICP, U.K. GDP, industrial output, manufacturing output, construction output, trade balance, NIESR GDP, France CPI, EU industrial production, U.S. MBA mortgage, CPI, Federal budget.
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