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Forex

Dollar awaits jobs data, sterling nurses losses after BoE

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The dollar held steady on Friday with its near-term fortunes riding on whether U.S. jobs data will rekindle expectations for the Federal Reserve to raise interest rates this year.

The British pound licked its wounds a day after the Bank of England not only cut interest rates but also restarted its bond purchase programme to shore up the economy.

With the BoE decision now out of the way, the market’s focus is shifting to the U.S. jobs report due at 1230 GMT.

A strong reading there could help the dollar by reviving expectations that the Federal Reserve could raise interest rates by year-end, a scenario that had been discarded in the days that followed the shocks from June’s Brexit vote.

Although surprisingly tepid U.S. second-quarter GDP growth figures published last Friday have dented the dollar, the greenback has recovered slowly.

The dollar index, which measures the greenback’s value against a basket of six major currencies, was last trading at 95.719, up from Tuesday’s five-week low of 95.003.

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Paul

The author Paul