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Dollar index holds steady, just off 15-month lows

8/3/2017, 5:41:06 PMTrading Strategies
 Dollar index holds steady, just off 15-month lows

The dollar held steady just off recent 15-month lows against the other major currencies on Thursday, amid ongoing U.S. political tensions and as investors awaited the release of Friday’s highly-anticipated U.S. employment data.

The dollar remained under pressure amid worries over political turmoil in Washington and recent lackluster economic reports, which have raised doubts over whether the Federal Reserve will raise rates again this year.

The dollar had been supported by the Fed's gradual policy tightening since late 2015 but the prospect that other major central banks may join it in tightening monetary policy has also fed into dollar weakness.

Investors were looking ahead to Friday’s nonfarm payrolls report for July to gauge whether the U.S. economy is strong enough for the Fed to stick to its planned tightening path.

Data on Wednesday showed that the U.S. private sector added 178,000 jobs in July, below economists’ expectations, but still in territory consistent with a strengthening labor market.

EUR/USD eased 0.08% to 1.1846, just off the previous session’s 32-month peak of 1.1909.

The single currency has been largely supported in recent weeks by expectations the European Central Bank will begin scaling back its monetary stimulus program in the autumn.

Elsewhere, GBP/USD rose 0.24% to an 11-month high of 1.3253 after research group Markit said its services purchasing managers’ index increased to 53.8 last month from a reading of 53.4 in June.

Analysts had expected the index to edge up to just 53.6 in July.

Later in the day, the Bank of England was expected to leave its monetary policy unchanged. Market participants were especially expected to focus on the central bank’s comments following the decision for any indications on future policy moves.

USD/JPY held steady at 110.65, while USD/CHF slipped 0.18% to trade at 0.9690.

The Australian and New Zealand dollars were weaker, with AUD/USD down 0.39% at 0.7936 and with NZD/USD shedding 0.23% to 0.7412.

Earlier Thursday, the Australian Bureau of Statistics said the trade surplus narrowed to A$0.856 billion in June from A$2.024 billion in May, whose figure was revised from a previously estimated surplus of A$2.471 billion.

Analysts had expected the trade surplus to narrow to only A$1.800 billion.

Meanwhile, USD/CAD gained 0.24% to trade at 1.2601, the highest since July 20.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 92.78, off the previous session’s 15-month low of 92.41