Dollar rally pauses for breath in reprieve for yen, euro
private payrolls data, leading investors to reduce bets the Federal Reserve will hike rates again this year.
After touching an 11-month high earlier this week, the dollar index, which tracks the greenback against six other currencies including the euro and yen, edged 0.07% lower to 106.68 after Wednesday's data showed U.S. private payrolls increased far less than expected in September.
Although analysts said more evidence was needed to be sure how fast the labour market is cooling, money markets cut their bets for a Fed rate hike in November, and are now seeing an almost 80% chance the central bank will keep its rates steady.
On Tuesday, they were pricing in a 28.2% chance of another hike, according to CME Group data.
Longer dated U.S. Treasury yields eased from 16-year highs, while the yen, which tends to be sensitive to U.S.
yields, traded at 148.92, up 0.13% against the dollar. It hit 150.165 on Tuesday, its weakest since October 2022.
«The fact that the negative (U.S.) data made more of an impression on market participants may be due to...the fact that euro/dollar levels below $1.05 and 10-year T-note yields above 4.80% simply were quite ambitious levels, which required a considerable amount of data to support them,» said Ulrich Leuchtmann, head of FX and commodity research at Commerzbank.
The euro was up 0.13% at $1.0518, having fallen on Tuesday to its lowest level this year at $1.0448.
