Dollar Edges Higher As Jobs Data Awaited

The dollar edged higher on Wednesday, backing off of a near five-month trough versus major peers, as traders waited for employment data later in the week before making any big moves.

The dollar index, which measures the greenback against six rivals, was up 0.06% at 89.961, after hitting a low of 89.662, near its lowest since Jan. 7 at 89.533.

"Interestingly, catalysts for the move have been fairly slight, suggesting some degree of risk-reduction ahead of Friday's key U.S. employment data," said Ned Rumpeltin, European head of FX strategy at TD Securities.

The May nonfarm payroll report will be closely watched by investors on Friday after April's much weaker-than-expected reading sent the dollar sharply lower last month.

Manufacturing data on Tuesday came in above expectations, due to pent-up demand amid the reopening from COVID-19 shutdowns, but labor shortages during the month actually hampered the sector's growth potential, the report said.

The euro traded 0.1% lower at $1.2201 after pulling back from near a multi-month top overnight, when it touched $1.22545.

Producer prices in the euro zone rose more than expected in April, boosted by a surge in energy costs, data showed. But the ECB, which wants to keep consumer price growth "below but close to 2%" over the medium term, said that while inflation may temporarily rise above its target this year, anaemic wage growth will likely keep it in check for years to come.

Sterling rose 0.18% to $1.4175, after easing off a three-year high of $1.4250 reached on Tuesday.

Elsewhere, the Canadian dollar eased 0.07% to C$1.2065 per greenback after rallying to a fresh six-year peak of C$1.2077 overnight as oil prices rose.

The Australian and New Zealand dollars dipped 0.1% and 0.12% respectively against the greenback. The Aussie was last at $0.7744, while the Kiwi was at $0.72405 against the U.S. dollar.


Investors were also eyeing the trajectory of China's recently bullish yuan. It was little changed at 6.3823 per dollar in offshore trading, after retreating from a three-year high of 6.3526 on Monday as policymakers took steps to cool its advance including raising banks' FX reserve requirements.

In cryptocurrencies, bitcoin was up 3.34%, at $37,919.89, while ether was up 7.52% at $2771.57. LONDON (Reuters)

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