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Dollar Edges Up Against Yen In Asia In Light Data Day

2018-1-8 10:30:49Market Analysis
Dollar Edges Up Against Yen In Asia In Light Data Day

The dollar edged higher against the yen in Asia on Monday in a light data day and with markets in Tokyo shut for a holiday.

USD/JPY changed hands at 113.12, up 0.05%, while AUD/USD traded at 0.7859, down 0.06%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted up 0.16% to 91.75.

Last week, the dollar ended slightly higher against a basket of the other major currencies on Friday after briefly dipping following a weaker-than-expected U.S. nonfarm payrolls report for December.

The U.S. economy added 148,000 jobs in December, the Labor Department reported, well below the 190,000 forecast by economists, while the unemployment rate held steady at 4.1%.

Employment data for October and November data were revised to show 9,000 fewer jobs created than previously reported.

Earnings rose by an annualized 2.5% in December, as expected, but November’s wage growth was revised down to 2.4% from 2.5%.

The dollar briefly slid to the day’s lows following the report before regaining ground.

While the report was disappointing given the miss in jobs growth the rise in wage growth was a bright spot.

The jobs data was seen as unlikely to alter investor expectations for a rate hike by the Federal Reserve at its March meeting.

Fed officials have penciled in three rate increases this year and two in 2019. Higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.

Fed funds futures have priced in a more than 67% chance the U.S. central bank will hike interest rates in March, according to Investing.com’s Fed Rate Monitor tool.

Another report showing that U.S. service sector activity cooled slightly in December had little impact on the dollar.

The dollar was higher against the yen late Friday, with USD/JPY rising 0.27% to 113.05.

The euro was lower against the greenback, with EUR/USD sliding 0.31% to 1.2029.

Sterling was slightly higher against the dollar, with GBP/USD rising 0.18% to 1.3573 as investors awaited further new developments on Brexit.

The dollar had fallen earlier in the week as expectations for faster monetary tightening outside the U.S., which would lessen the divergence between the Fed and other central banks, weighed.

In the week ahead, investors will be turning their attention to U.S. inflation data and comments by a number of Fed speakers for further clues on the timing of the next rate hike