SINGAPORE: The dollar rose against most Asia Pacific currencies on Thursday but gains were capped as traders waited for clearer signals on the timing of a possible US interest rate hike.
The New Zealand dollar bucked the trend, surging against the greenback after the country’s central bank slashed interest rates to a record low of 2.0 percent and said further easing might be necessary.
Forecast-beating US jobs numbers in July, released Friday, revived speculation that the US Federal Reserve might lift interest rates later this year, sparking a greenback rally.
But a subsequent report showing US second-quarter productivity had fallen 0.5 percent poured cold water on chances of an interest rate hike this year.
Traders are waiting for clearer signs on the Fed’s next move, said Bernard Aw, an analyst with IG Markets in Singapore.
“In the meantime, sentiment will be sensitive towards US data, including inflation numbers,” he said.
Markets are waiting on Federal Reserve chair Janet Yellen’s speech later this month at a meeting of global policy makers in Jackson Hole, Wyoming.
“Markets are feeling comfortable that there won’t be any immediate effects from the Fed before Jackson Hole,” Vassili Serebriakov, a foreign-exchange strategist at Credit Agricole CIB in New York, told Bloomberg News.
“It gives some opportunity to sell the dollar against some of these higher-yielding currencies.”
At around 0500 GMT Thursday, the dollar was at 101.43 Japanese yen, up from 101.26 yen in late US trade on Wednesday.
The euro was at $1.1168 from $1.1183 in US trade, and was changing hands at 113.28 yen from 113.25 yen.
Japanese financial markets are closed Thursday for a holiday.
The New Zealand dollar rose 0.79 percent to 0.73 against the greenback in early afternoon Asian trade.
New Zealand’s interest rate cut was in line with market expectations, and the bank indicated it may slash rates further to boost the economy.
The US dollar was up against the Taiwan dollar, South Korean won, Indonesian rupiah, Indian rupee, Chinese yuan, Malaysian ringgit and the Thai baht, but was down against the Philippine peso.
The Australian dollar was down 0.06 percent at 0.77 to the greenback.