The dollar fell to a two-week low against the euro as investors pushed back bets for when the Federal Reserve will increase interest rates.
Australia’s currency erased an earlier decline as traders treated data showing employers unexpectedly cut payrolls last month with caution following changes to labor-market figures by the statistics bureau yesterday. The euro was near the strongest in three weeks versus the pound before European Central Bank President Mario Draghi speaks in Washington and the Bank of England announces a policy decision.
“The Fed may not raise rates as early as expected,” said Masafumi Yamamoto, a former central-bank analyst who is now President at Praevidentia Strategy Ltd. in Tokyo. “Those who got a little ahead of themselves on Fed policy are reducing dollar long positions.” A long position is a bet that an asset will rise.
The dollar was little changed at $1.2732 per euro as of 10:48 a.m. in Tokyo after depreciating to $1.2755, the weakest level since Sept. 26. The U.S. currency was also little changed, at 108.17 yen. The euro advanced 0.1 percent to 137.72 yen.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, was unchanged at 1,062.13 after dropping 1.5 percent during the previous three days.
A number of Federal Open Market Committee participants said expansion “might be slower than they expected if foreign economic growth came in weaker than anticipated,” according to minutes of their Sept. 16-17 meeting released yesterday.
Source: Bloomberg (09 Oct 2014)
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