Euro extends recent slide, US dollar gains ahead of jobs data

  • The euro at its lowest since 2016 against the pound sterling
  • Russian ruble hits new low in Moscow trading

NEW YORK, March 3 (Reuters) – The euro extended its recent declines and hit its lowest level since 2016 against the pound on Thursday as investors worried about the impact of rising oil prices after Russia’s invasion of Ukraine, while the US dollar index rose as the Federal Reserve Chairman. Jerome Powell reiterated that he supports a 25 basis point hike this month.

Powell repeated the comments on his second day of testimony before Congress. The dollar was also supported by weekly U.S. jobless claims data, which suggests the labor market is gaining momentum, a day ahead of the key U.S. jobs report. from February. Read more

Data showed the number of Americans filing new claims for unemployment benefits fell to its lowest level this year last week. Economists anticipate another month of strong job growth in Friday’s jobs report. Read more

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The US dollar index last rose 0.4% and hit its highest level since June 2020, while the dollar was down slightly against the yen.

“The dollar is in a major groove right now, benefiting from safe-haven flows and the strength of the US economy,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

“Granted, the data this week has been really bullish…so if we see strong job growth coupled with oil-fuelled inflation, we think that would keep strong Fed rate hikes in the conversation” , did he declare.

In other US data, new orders for US-made goods rose more than expected in January, indicating continued strength in the manufacturing sector.

Oil calmed down after hitting prices not seen in about a decade. Sellers jumped on hopes that the United States and Iran will soon agree on a nuclear deal that could add barrels to a tight global market.

Russia and Ukraine have agreed on the need to set up humanitarian corridors and a possible ceasefire around them for fleeing civilians, the two sides said after talks on Thursday, while forces Russian invasion forces surrounded and shelled Ukrainian towns as the conflict entered its second week. Read more

“The Ukraine crisis has really ignited a fire under oil, and we show how this is really becoming a source of significant weakness for the euro and a major source of strength for commodity currencies,” Manimbo said.

The euro fell 0.5% to $1.1060 and hit its lowest level since May 2020 again. It is heading for its fourth straight weekly decline against the US dollar. Against the British pound, the euro hit its lowest level since July 2016.

Currencies linked to commodities mainly rose. The Australian dollar appreciated 0.3% against the US dollar.

The Russian ruble was flat at the end of the day on the Moscow exchange at 106.01 after hitting an all-time low of 118.35 in thin and volatile trade. The Russian central bank has imposed a 30% commission on purchases of foreign currencies by individuals on the foreign exchange markets – a measure which brokers say seems intended to curb demand for dollars. Read more

The US dollar last appreciated about 12% against the ruble.

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Currency rates at 3:35 p.m. (8:35 p.m. GMT)

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Additional reporting by Dhara Ranasinghe in London and Tom Westbrook in Singapore; Editing by Hugh Lawson, Edmund Blair and Jonathan Oatis

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