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Dollar Pares Losses as GBP/USD Falls to Nearly 3-Week Lows

11/3/2017, 11:21:18 AMTrading Strategies
Dollar Pares Losses as GBP/USD Falls to Nearly 3-Week Lows

The dollar traded lower against a basket of major currencies as investors digested upbeat labor market data ahead of President Donald Trump’s choice of nominee to head the Federal Reserve.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.10% to 94.61.

A pair of upbeat labor market reports pointed to underlying strength in the labor market ahead of nonfarm payrolls due Friday.

The U.S. Department of Labor reported Thursday that initial jobless claims fell 5,000 to a seasonally adjusted 229,000 for the week ended Oct. 28, a steeper drop than economist had expected.

In a separate report, the Labor Department said that nonfarm productivity, which measures hourly output per worker, rose at a 3% annualized rate, outpacing economists’ forecasts of 2.4%.

The better-than-expected reports on the labor market follows a ADP report released Wednesday, showing private employers added 235,000 jobs in October, fueling expectations for a bullish nonfarm payrolls report due Friday.

The data comes amid speculation that Donald Trump is set to nominate Fed governor Jerome Powell to lead the Federal Reserve in early February.

Losses in the dollar, however, were limited by a slump in the pound to a nearly three-week low after the Bank of England, despite raising rates, said it was in “no hurry” to raise them again.

GBP/USD fell 1.37% to $1.3065.

EUR/USD rose 0.34% to $1.1659, while EUR/GBP surged 1.74% to £0.8925 after a slew of upbeat Eurozone manufacturing PMIs lifted sentiment on the single currency.

USD/JPY fell 0.04% to Y114.12, while USD/CAD fell 0.35% to C$1.2821