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Singapore - The dollar fell for the first time in seven days against the yen, snapping its longest winning streak since March, as investors awaited the next US jobs report to assess the outlook for interest rates in the world’s largest economy.
The greenback declined against the Australian dollar after data released on Thursday signaled a recovery in non-mining capital spending in the South Pacific nation and China’s official factory gauge unexpectedly rose last month to the highest level in almost two years.
Bloomberg’s measure of the US currency versus major peers fell for the first time in five days as economists predict Friday’s employment report will show jobs growth slowed to 180 000 last month from 255 000 in July.
“FX markets are waiting for Friday’s US August employment report for dollar direction,” said Elias Haddad, a senior foreign-exchange strategist at Commonwealth Bank of Australia in Sydney.
The dollar slid 0.1% to ¥103.30 at 07:55, after surging 3.2% in the previous six days. The greenback dropped 0.3% to 75.40 cents versus the Aussie, following a 1.1% gain last month. Futures traders see a 96% probability that the Reserve Bank of Australia will keep its benchmark rate at a record low 1.5% when it decides on policy on Tuesday.
The Bloomberg Dollar Spot Index slipped less than 0.1%, halting a 1.5% advance since August 25 through on Wednesday.
September move?
The prospect that the Federal Reserve will increase rates as early as its September 20 to September 21 meeting climbed to 36% from 18% at the start of August, according to fed fund futures data compiled by Bloomberg. The chance of an increase by December was 60%.
The Fed “is unlikely to sustainably upset the apple cart,” analysts at Australia & New Zealand Banking, led by foreign-exchange research head Daniel Been, wrote in a monthly outlook report.
“While a September hike is not impossible, forward guidance will remain cautious and a range break for the dollar is highly unlikely.”
