Dollar pressured in Asia on US jobs data


SINGAPORE: The dollar faced fresh pressure in Asian trade on Monday as lackluster US jobs data fueled speculation about the Federal Reserve’s plans to wind down its stimulus program.

The euro bought $1.3677 in afternoon Singapore trade from $1.3666 in New York City on Friday. The greenback eased to 103.47 yen from 104.15 yen. The euro bought 141.52 yen from 142.33 yen.

The dollar closed at P44.60 in Manila. The greenback closed at P44.71 to a dollar on Friday.

Japanese financial markets were closed for a public holiday.

The greenback’s losses extended those seen in New York City on Friday, after data from the US Labor Department showed that the economy added a mere 74,000 jobs in December, well below the consensus estimate of 197,000.

The unemployment rate dropped to 6.7 percent from 7 percent in November, although that was mostly because more people had given up looking for work.

The Fed last month said that it would cut its monthly bond purchases by $10 billion to $75 billion in January, as the economy showed signs of strengthening and the unemployment rate falls.

Analysts were eagerly awaiting the jobs numbers as they were seen to likely influence whether further cuts would follow swiftly.

“The dollar traded much lower against all majors following the appalling jobs report,” Desmond Chua, market analyst at CMC Markets in Singapore, wrote in a note.

He said that the dollar was likely to remain pressured below the $105.30 yen level owing to “the outlook in the US looking slightly bleak before US consumer confidence and retail sales data later this week.”

However, French bank Credit Agricole said that the jobs data was not likely to alter the Fed’s plan to continue with its so-called tapering.

“Adverse weather may have played a role in the weakness, while complicating matters was the drop in the unemployment rate to 6.7 percent largely due to people leaving the jobs market,” it said in a note.

The lender said that the euro faced downside risks after European Central Bank president Mario Draghi last week said that the ECB governing council had discussed using “all eligible instruments allowed by the [EU] treaty” if inflation in the 18-nation economic bloc continues to fall.

“From that angle, it cannot be ruled out that more aggressive policy action such as quantitative easing will be considered if monetary conditions tighten further,” Credit Agricole said.

The greenback was mostly lower against other Asia-Pacific currencies.

It eased to Tw$29.96 from Tw$30.02 in Tokyo on Friday, to 12,043 Indonesian rupiah from 12,198 rupiah, to Sg$1.2647 from Sg$1.2693.

It also eased to 1,056.80 South Korean won from 1,061.50 won, and to 61.54 Indian rupees from 61.92 rupees. It rose to 33.03 Thai baht from 33.00 baht.

The Australian dollar edged up to 90.31 US cents from 88.99 cents, while the Chinese yuan was at 17.12 yen against 17.30 yen.



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