The US dollar attempted to extend the previous week’s rally against the euro today and was successful at the start of the trading session, but reversed its advance later and trades below the opening level as of now. The greenback also fell versus the Japanese yen but rose against the Great Britain pound.
Forex market participants argue whether the Federal Reserve will start raising interest rates sooner, prompted by very good employment data, or will stick to its previous plans to start monetary tightening closer to the end of the next year. On one hand, non-farm payrolls were extremely positive and suggested that the economy performs well. On the other, the recent dismal growth data discouraged investors from being too optimistic.
Of course, besides fundamental reasons for the dollar’s moves, there are also speculations that the currency’s rally was excessive and should slow however supportive news would be. As for the interest rate outlook, the Fed will release minutes of its latest policy meeting, and they may provide additional insights into thought patterns of US policy makers.
EUR/USD was down from 1.3595 to 1.3576 intraday but bounced to 1.3608 as of 19:02 GMT today. GBP/USD dropped from 1.7166 to 1.7128, while USD/JPY declined from 102.06 to 101.85.
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