The US dollar soars higher; traders consider non-farm wages

Illustrative photo of US Dollar, Swiss Franc, British Pound and Euro banknotes, taken in Warsaw on January 26, 2011. REUTERS / Kacper Pempel / File Photo

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  • Merchants turn to U.S. non-farm payrolls
  • Omicron still worries about weighing on FX
  • Fed officials back Powell’s accelerated cutback move
  • Early U.S. jobless claims give dollar a brief boost
  • Chart: Global exchange rates

NEW YORK, Dec. 2 (Reuters) – The dollar edged higher on Thursday in choppy trading as risk appetite improved with the rise in US stocks, although investors remained concerned about the rapid spread of the Omicron variant of the coronavirus and the rate at which the U.S. Federal Reserve will scale back its asset purchases.

Movements in the US currency were limited, however, as investors eagerly awaited Friday’s non-farm payroll report for November.

“A really strong payroll report, as we anticipate, could be another piece to reassert the dollar,” said Mazen Issa, senior currency strategist at TD Securities in New York.

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Wall Street economists estimated that the US economy created 550,000 new jobs last month, according to a Reuters poll.

In afternoon trading, the dollar index, which tracks the greenback against six major currencies, rose 0.1% to 96.131.

The index fell last week after Omicron’s announcement, although it remains near a 16-month high of 96.938 reached last month.

The United States recorded its second case of the Omicron variant on Thursday, but it had a moderate impact on stocks and other risky assets.

“Anecdotal evidence seems to suggest it may not be as bad as a lot of people feared,” TD’s Issa said.

“If there’s something to take away from all of this, it’s that the impact of successive waves of the virus tends to get smaller and smaller the longer it lasts. Yes, it’s still a risk. , but vaccine makers are able to adapt to cope, “he added.

The United States and Germany on Thursday joined countries around the world with stricter COVID-19 restrictions. Read more

The dollar appreciated 0.4% against the yen at 113.155.

The greenback gained earlier after US data showing the state’s initial jobless claims rose from 28,000 to seasonally adjusted 222,000 for the week ended November 27, lower than the forecast of 240,000. Read more the following

The British pound, meanwhile, rose 0.2% to $ 1.3298, while the euro slipped 0.2% to $ 1.1294.

Scotiabank, in a research note, highlighted the attractiveness of the euro as a “semi-safe-haven currency”. Since the Omicron story broke last week, the euro has gained 0.9% against the dollar.

However, Scotia expects the euro to weaken towards the $ 1.10 / 11 area given weak economic fundamentals and short-term rates, although uncertainty related to the virus is expected. maintain in a range of $ 1.12 to $ 1.14 at the moment.

Currency volatility trackers remain at multi-month highs, suggesting big moves could still be in store, analysts noted.

Traders are also awaiting clarification on how quickly the Fed will cut back on asset purchases, as central banks around the world grapple with how to lift stimulus in the face of soaring inflation.

Fed Chairman Jerome Powell reiterated in testimony to Congress on Wednesday that he and his fellow policymakers would consider faster action at their December 14-15 meeting. Read more

Several Fed officials – Atlanta Fed Chairman Raphael Bostic, Richmond Fed Chairman Thomas Barkin and San Francisco Fed Chairman Mary Daly – echoed Powell’s comments on Thursday. Read more

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Currency bid prices at 3:09 p.m. (2009 GMT)

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Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Iain Withers in London; Editing by Emelia Sithole-Matarise, Nick Macfie, Andrea Ricci and Dan Grebler

Our Standards: Thomson Reuters Trust Principles.

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