Dollar inches toward one-year high

LONDON (Reuters) – FX SIGNALS _ The U.S. dollar edged back toward a one-year high versus major peers on Tuesday ahead of a key payrolls report at the end of the week that could boost the case for the Federal Reserve to start tapering stimulus as soon as next month.

The safe-haven greenback was also supported by an equity sell-off that spread from Wall Street to Asia.

The risk-sensitive Australian dollar was among the biggest decliners, with the Reserve Bank of Australia reiterating it doesn’t expect to raise interest rates until 2024 after keeping policy steady, as expected.

The U.S. dollar index, which measures the currency against six rivals, rose 0.13% to 93.957, moving back toward Thursday’s peak at 94.504, its highest since late September 2020.

The index had rallied as much as 2.8% since Sept. 3 as traders rushed to price in tapering this year and possible rate rises for 2022.

The dollar has also benefited from haven demand amid worries spanning the risk of global stagflation to the U.S. debt ceiling standoff.

“The dollar started the week on the back foot yesterday, failing to rise on yet another equity sell-off, and suffering from the OPEC+ decision to stick to gradual supply hikes (400k barrels/day) which sent oil prices (and oil-sensitive currencies) higher,” ING strategists said in a note.

Dollar Down but Near One-Year High

“As highlighted in yesterday’s FX Daily, we think markets will keep buying the dips in the dollar, and this is what appears to have happened overnight, as the greenback rebounded across the board.”

Friday’s non-farm payrolls data is expected to show continued improvement in the labour market, with a forecast for 488,000 jobs to have been added in September, according to a Reuters poll.

Meanwhile, an index of Asia-Pacific equities skidded 0.92%, following a 1.3% tumble overnight for the S&P 500.

Dollar Down, but Near One-Year High

The Aussie dropped 0.34% to $0.7263, retreating further from Monday’s four-day high of $0.73045.

The New Zealand dollar declined 0.34% to $0.6939, also backing away from a four-day peak at $0.6981. The Reserve Bank of New Zealand decides policy on Wednesday, with markets priced for a quarter point rate hike.

Dollar Hits One-Year High Versus Yen

“The RBA’s firm on‑hold stance is a weight on AUD,” Commonwealth Bank of Australia (OTC:CMWAY) strategist Joseph Capurso wrote in a report.

FX Signals

For the RBNZ, “with markets already pricing a rate hike cycle, the likelihood of material NZD upside is low,” he said.

The dollar gained 0.25% to 111.19 yen, while the euro slid 0.21% to $1.15965.

Dollar Up Holds Onto Biggest Gains

Sterling traded flat at $1.3612.

While the consensus view is for further gains for the greenback – with speculators pushing net long bets to the highest since March 2020 – TD Securities warns that headroom may be limited.

Dollar Up but Remains Near Week Low

“While the near-term USD bias leans higher, we’re wary about chasing the move at these levels,” Mark McCormick (NYSE:MKC), TD’s global head of FX strategy, wrote in a report.

“There’s a lot of bad global news priced into the USD” already, and “the key for markets in the weeks ahead is to sort out the extent of the risk premium already priced in versus how these factors play out,” McCormick said.

Dollar inches toward one-year high

Live Forex News

Subscribe to our Signals and start receiving Forex Day Trading Signals from the very next trade! Forex Signals Learning Guides below with guide you with every trade you make!

FxPremiere Group has helped over 5,000 Forex Affiliates earn up to $800 CPA on referrals and has grown immense revenue streams for online affiliates. Trading Forex has never been easy. The World of Forex Trading is growing day by day and its crucial to keep up to date with trends and market analysis. Here at FxPremiere Group we keep you updated with the Compare Forex Brokers charting system, as well as sending you Direct Forex Signals by our Telegram Services globally daily.

FX Signals

The most traded pairs of currencies in the world are called the Majors.EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD, Gold, Oil and many many more… Forex Trading comes with it high risk. We help by referring only the very best forex brokers available in the marketplace. Your in safe hands with our partners.With our free forex learning guides you will be able to educate yourselves with the most up to date forex basics required in order to enter the Capital Markets. FxPremiere.com Learning centre is now available for all to read. With blog posts written monthly on the most common searched terms.