The dollar slid 0.15% against major currencies to trade at 104.21
The dollar slid on Friday as investors fretted U.S. payrolls data could be weak after an unexpected slump in U.S. manufacturing raised concerns about a slowdown in the country’s economy and lifted traditional safe-haven currencies.
The yen firmed, pushing the dollar down 0.3% to 148.90, building on gains in the wake of a BoJ decision to raise rates and firming as far as 148.51 overnight for the first time since mid-March. The Swiss franc added nearly 0.1% to 0.8718 per dollar, and earlier hit its highest level since early February at 0.8707.
They were among the top performing currencies this week, with gains of around 3% and 1.1%, respectively.
What we are seeing this morning is a continuation of what we saw yesterday, which is markets striking a very risk-averse tone since the ISM manufacturing data, said Michael Brown, market strategist at Pepperstone in London.
In the case of the yen, obviously you’ve got the continued carry unwind and safe-haven demand is in place as well, he added.
The dollar slid 0.15% against major currencies to trade at 104.21.
U.S. 10-year Treasury yields slumped as much as 14 bps to 3.965% overnight, breaking the key 4% barrier for the first time in six months, and extended those declines to 3.9490% in London trading. This in turn weighed on the dollar.
The market seems to already price in a very weak nonfarm payrolls, so if we get something anywhere near consensus, dollar yields are likely to rise, which in turn will probably drag the dollar index, according to Mizuho economist Colin Asher.
Movements in Treasury yields/front-end Fed pricing are looking pretty extreme as well, Asher added.
