NEW YORK : The dollar took a breather on Thursday, a day after being given a boost from seemingly hawkish comments by a top Federal Reserve official, as the market awaited new direction from Friday's U.S. jobs report.
The dollar index against major currencies was down 0.03per cent to 92.249 in the afternoon in New York.
On Wednesday, Fed Vice Chair Richard Clarida said conditions for an interest rate hike could be met in late 2022, setting the stage for a move in early 2023.
"Clarida’s comments are allowing the dollar to stay well supported into the payrolls numbers on Friday," said ING FX strategists Francesco Pesole and Chris Turner.
The greenback, which gained 0.2per cent on Wednesday, was traded in a relatively tight range through the day, unmoved by new government reports on jobless claims and the trade deficit that came in close to estimates from economists.
It also shrugged off another up-day in U.S. stocks and movement in the U.S. Treasury market, where the yield on the 10-year note rose as much as 4 basis points and was last at 1.2152per cent.
"The market has been in a wait-and-see mode until we get past tomorrow's nonfarm payroll report," said Ed Moya, senior market analyst at broker OANDA.
Friday's employment report for U.S. employment in July is seen as highly uncertain but critical to Fed policymakers deciding when to begin tapering support for the economy.
"If we get an impressive read tomorrow, that would have the market firmly pricing in tapering and allow the yield curve to steepen and provide the dollar with support," Moya said.
According to a Reuters survey of economists, nonfarm payrolls likely increased by 880,000 jobs in July, up from 850,000 in June. Economists have warned that the spread of the Delta variant of the coronavirus and mixed readings from labor market indicators make estimates for July troublesome.
The British pound was up 0.3per cent to US$1.3931 by 3:06 p.m. ET (1906 GMT) after the Bank of England kept the size of its bond-buying programme unchanged and held its benchmark interest rate at a historic low of 0.1per cent.
The central bank said it would start reducing its stock of bonds when its policy rate reaches 0.5per cent by not reinvesting proceeds and that it would consider actively selling down holdings when the rate reaches at least 1per cent.
"The undertones of today’s policy statement and monetary policy report (MPR) are much more hawkish than initially expected," said Simon Harvey, senior FX analyst at Monex Europe.
The euro was flat at US$1.1835.
Against the yen, the dollar rose 0.25per cent to 109.75.
Ether, the second-largest cryptocurrency, was up 3per cent to US$2,810 after an initial dip when the Ethereum blockchain network activated a technical change that was to take some tokens out of circulation.
Bitcoin rose 3per cent to US$40,987.
Currency bid prices at 3:06PM (1906 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
92.2490 92.2810 -0.03per cent 2.521per cent +92.3520 +92.1130
US$1.1835 US$1.1837 -0.02per cent -3.14per cent +US$1.1857 +US$1.1829
109.7500 109.4900 +0.24per cent +6.22per cent +109.7850 +109.4050
129.89 129.57 +0.25per cent +2.34per cent +130.0200 +129.5800
0.9063 0.9065 -0.04per cent +2.42per cent +0.9077 +0.9052
US$1.3931 US$1.3891 +0.30per cent +1.97per cent +US$1.3949 +US$1.3873
1.2495 1.2542 -0.37per cent -1.87per cent +1.2547 +1.2476
US$0.7405 US$0.7382 +0.32per cent -3.74per cent +US$0.7416 +US$0.7377
1.0726 1.0728 -0.02per cent -0.75per cent +1.0741 +1.0721
0.8492 0.8521 -0.34per cent -4.96per cent +0.8528 +0.8491
Dollar/Dollar US$0.7061 US$0.7044 +0.22per cent -1.70per cent +US$0.7073 +US$0.7039
8.8070 8.8465 -0.42per cent +2.59per cent +8.8495 +8.8000
10.4225 10.4555 -0.47per cent -0.42per cent +10.4763 +10.4204
8.6125 8.6095 +0.06per cent +5.08per cent +8.6191 +8.5995
10.1928 10.1870 +0.06per cent +1.16per cent +10.2035 +10.1820
(Reporting by David Henry in New York and Ritvik Carvalho in London; additional reporting by Wayne Cole in Sydney; Editing by Marguerita Choy and Jonathan Oatis)