The U.S. dollar declined against its major rivals on Thursday, as traders cautiously await U.S. nonfarm payrolls for April due tomorrow, after weak hiring in private sector employment led to uncertainty over the timing of the Fed rate hike.
Economists are expecting that the US economy may have added 230,000 jobs in April, up 126,000 jobs created in March. This would take the US unemployment rate down to 5.4 percent from 5.5 percent in March.
The currency was hit hard after ADP data came in well below expectations in April and the Fed chief Janet Yellen warned that equity valuations were generally “quite high.”
On Wednesday, payroll processor ADP said that the U.S. economy created 169,000 private sector jobs in April. Traders were looking for a reading of 200,000.
Speaking at a conference at IMF headquarters in Washington, Yellen told that equity market values at present generally were quite high. she added that there would be a sharp rise in long-term rates, following rate hike.
The dollar fell 6.32 percent against the franc, 7.38 percent against the euro, 3.89 percent against the pound and 0.56 percent against the yen since mid-April, as weak data stoked concerns about the strength of the economy.
The greenback depreciated to 0.9071 against the Swiss franc, its lowest since January 29. This is down by 0.95 percent from yesterday’s closing value of 0.9158. The next possible support for the greenback-franc pair may be located around the 0.90 level.
The greenback dipped to a 2-1/2-month low of 1.1391 against the euro, compared to 1.1346 hit at Wednesday’s close. Continuation of the greenback’s downtrend may lead it to a support around the 1.145 mark.
The greenback that ended yesterday’s trading at 119.41 against the yen declined to a weekly low of 119.05. If the greenback extends fall, 118.5 is seen as its next support level.
Reversing from an early high of 1.5163 against the pound, the greenback eased to 1.5247 and has been steady thereafter. The greenback is seen finding support around the 1.55 area.
Looking ahead, Canada building permits for March, U.S. weekly jobless claims for the week ended May 2 and U.S. consumer credit for March are set to be announced in the New York session.
At 8:30 am ET, Federal Reserve Bank of Chicago President Charles Evans is expected to speak on current economic conditions and monetary policy, in New York.
Subsequently, European Central Bank board member Yves Mersch will deliver a lecture at the Barcelona Graduate School of Economics in Spain at 12:45 pm ET.
The material has been provided by InstaForex Company – www.instaforex.com