© Reuters.
By Peter Nurse
Investing.com – The U.S. dollar trails Thursday ahead of jobs data, while the euro remains at a one-month high against the greenback on hopes the Ukraine-Russia conflict is headed for a de-escalation phase.
At 9:05 AM ET, the , which tracks this currency against a basket of six other major currencies, was down 0.1% at 97.810.
The US dollar received a boost on Wednesday after data showed that US companies employed 455,000 more people in March, growth that coincides with the Federal Reserve’s view that the labor market is strong.
This is known before the weekly data for Thursday and, above all, the official monthly report for Friday.
The US Federal Reserve raised interest rates earlier this month and signaled a series of future hikes to combat rising inflation, as long as the economy does not slip into recession, as an inverted yield curve has warned.
The strength of the labor market suggests that the Fed will feel confident to go ahead with more interest rate hikes in the coming months, to the benefit of the dollar.
The pair fell 0.2% to the 121.58 level, stabilizing after reaching its lowest level since November 2015 on Monday, with the Bank of Japan intervening to prevent government bond yields from rising too high, in stark contrast to the approach of the US Federal Reserve.
“The dollar remains cheap against most of the G10 currencies in the short term when taking into account short-term rate differentials, which are normally a key driver of currency movements,” ING analysts explain. (AS:) in a note.
Elsewhere, the pair is up 0.1% to the 1.1172 level, with the single currency gaining around 1.6% this week, and hitting a one-month high, on growing hopes that the conflict in Ukraine could be nearing a conclusion.
Peace talks between Ukraine and Russia, held in Istanbul earlier in the week, fueled hopes of progress. And although Russia has continued to attack in the east of the country, its promise to reduce military operations around kyiv has raised hopes that the conflict could enter a new phase of de-escalation of violence. In addition, new peace talks are scheduled to be held on Friday.
“At this point, we don’t think there is much geopolitical left in most assets, as markets appear to have taken a bullish stance long before the peace talks have delivered anything,” ING adds.
The pair is up 0.1% to the 1.3140 level, helped by data showing that the UK economy grew faster than previously thought in the last three months of 2021, as the rose 1.3% in the fourth quarter compared to the previous quarter, exceeding preliminary growth estimates of 1.0%.
The pair dipped 0.4% to 0.7479, reversing some of the pair’s earlier gains, while the pair fell 0.1% to 6.3425 after sectors and in China contracted simultaneously in March 2022 for the first time in two years.
