The euro gained 0.06 per cent to $1.0767 but stood not too far from Friday’s more than three-week low of $1.07235, while the dollar index stabilised at 103.95
The dollar started Monday on the front foot, with a reading on U.S. inflation and the Fed’s last policy meeting for the year likely to set the tone for the week, while growing deflationary pressure in China leant on the yuan.
The dollar pushed back above 145 yen and last bought 145.12 yen, reversing some of its sharp decline against the Japanese currency late last week, as bets grew that the Bank of Japan’s ultra-low rates policy may be nearing an end.
Sterling dropped 0.02 per cent to $1.2545 and was huddled near Friday’s two-week low of $1.2504.
Data on Friday showed U.S. job growth accelerated in November while the unemployment rate dropped to 3.7 per cent, underscoring the resilience of the labour market in the world’s biggest economy and challenging expectations of imminent rate cuts from the Federal Reserve beginning early next year.
They were a good set of numbers, said Joseph Capurso, head of international and sustainable economics at CBA.
Wages were still running probably too hot for the Fed to be comfortable and the unemployment rate dropped – that was a really big surprise, he said.
The figures caused traders to push back expectations of how soon the Federal Reserve could begin cutting rates, with many now leaning toward May instead of March.
The euro gained 0.06 per cent to $1.0767 but stood not too far from Friday’s more than three-week low of $1.07235, while the dollar index stabilised at 103.95.
The index added more than 0.7 per cent last week, reversing three weeks of loss.
Focus now turns to the FOMC policy meeting later this week and U.S. inflation numbers due ahead of that, where expectations are for consumer prices to continue dropping on an annual basis.
