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Dollar Gains Against Rivals Ahead of U.S. Jobs Report

8/3/2018, 11:39:17 AMBasics of Trading
Dollar Gains Against Rivals Ahead of U.S. Jobs Report

The dollar rose against its rivals Thursday on upbeat labor market data and a slump in the pound, despite the Bank of England raising rates for the first time this year.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.40% to 94.84.

The U.S. Department of Labor reported Thursday that initial jobless claims rose by 1,000 to a seasonally-adjusted 217,000 for the week ended July 27, beating economists’ forecast for a rise to 218,000.

The upbeat labor market report comes a day ahead of the closely-watched nonfarm payrolls report expected to show the U.S. economy created 193,000 jobs in July.

The dollar's advance was helped by a slump in the pound as the Bank of England raised rates but signaled that it was in no hurry to raise rates again, warning that a lack of progress on Brexit talks could impact monetary policy decisions.

"It is almost unthinkable that the Bank of England will follow up with further rate rises in the next few months given the risks on the horizon," said Aberdeen Standard Investments.

GBP/USD fell 0.72% to $1.3032.

The dollar pared losses against the yen, which followed an increase in demand for safe-haven currencies like the yen and Swiss franc on rising U.S.-China trade tensions.

USD/JPY fell 0.07% to Y111.64 after trading as low as Y111.32, while USD/CHF rose 0.27% to 0.9947.

U.S. President Donald Trump proposed a higher 25% tariff on $200 billion worth of Chinese imports, his administration said on Wednesday, raising fears of an escalating trade-war between the world's two largest economies, which could hit global growth.

EUR/USD fell 0.45% to $1.1608 while USD/CAD fell 0.05% to C$1.2997.