{"id":119565,"date":"2021-08-09T11:56:26","date_gmt":"2021-08-09T11:56:26","guid":{"rendered":"https:\/\/fin2me.com\/?p=119565"},"modified":"2021-08-09T11:56:26","modified_gmt":"2021-08-09T11:56:26","slug":"dollar-cements-rebound-after-jobs-data-triggers-tapering-bets","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/dollar-cements-rebound-after-jobs-data-triggers-tapering-bets\/","title":{"rendered":"Dollar cements rebound after jobs data triggers tapering bets"},"content":{"rendered":"
LONDON (Reuters) – The dollar hit a four-month high against the euro on Monday, reversing a recent fall after strong labour market data encouraged investors to bring forward their bets on the Federal Reserve reducing its pandemic-era stimulus.<\/p> The U.S. currency strengthened as far as $1.1742 to the euro , extending a 0.6% pop from Friday, when the U.S. jobs report stoked bets that the Fed could start trimming asset purchases this year and raise rates as soon as 2022. By contrast, few are expecting the European Central Bank to even hint at slimming stimulus any time soon.<\/p>\n By 1045 GMT, the currency pair had settled at $1.1754.<\/p>\n Graphic: Euro vs dollar,<\/p>\n Against a basket of currencies, the dollar was down 0.1% at 92.811 but remained close to four-month highs of 93.194.<\/p>\n The dollar also climbed as high as 110.37 yen, after a 0.4% rally at the end of last week.<\/p>\n Following the jobs report, the benchmark 10-year Treasury yield jumped 8 basis points on Friday to a two-week high of 1.307%. On Monday it gave back some of those gains to trade at 1.2817%, down 6 basis points.<\/p>\n \u201cA strong U.S. employment report on Friday triggered a jump in U.S. bond yields, supporting the U.S. dollar higher,\u201d said Alvin Tan, currencies strategist at RBC Capital Markets.<\/p>\n Friday\u2019s non-farm payroll report showed 943,000 new jobs in July compared with the 870,000 forecast by economists in a Reuters poll. Numbers for May and June were also revised up.<\/p>\n Fed officials have made a jobs market recovery a condition of tighter monetary policy.<\/p>\n Analysts noted that market participants had pushed forward the Fed\u2019s tapering announcement to as early as the Jackson Hole symposium in late August.<\/p>\n \u201cAs markets digest the increasingly-proximate reality of Fed policy recalibration (serving to benefit USD vs EUR as monetary policies diverge), the potential for accompanying risk asset and commodity price \u2018normalization\u2019 could emerge as a separate medium-term driver of USD gains against cyclical FX,\u201d Ben Randol, currencies strategist at Bank of America, wrote in a research note.<\/p>\n Speculators cut their net long dollar positions in the latest week, data showed on Friday, but they are still positioned for its gains.<\/p>\n There were signs of the immediate dollar spike fizzling, however, with markets generally quiet as investors warily watched a rise in COVID-19 cases across Asia. Sharp falls in gold and oil prices also weighed on sentiment.<\/p>\n The dollar was unchanged against the offshore Chinese yuan after Friday\u2019s rally.<\/p>\n Sterling inched higher to $1.3884 after earlier falling to $1.3856.<\/p>\n The commodity-linked Australia dollar eased while the Canadian dollar stabilised after weaker oil prices last week hit the currency.<\/p>\n