6 July 2005, 17:42  Dollar holds high ground ahead of U.S. data

The dollar maintained a slim advance Wednesday amid expectations that a relatively strong U.S. payrolls report due Friday will justify a greenback at multi-month highs against the world's leading currencies. Ahead of that report, Wednesday's survey of the U.S. services sector from the Institute for Supply Management would be closely watched. The report includes a measure of employment and a strong reading there could rally the dollar, analysts said. For Friday's report, a MarketWatch survey pegs payrolls growth last month at 190,000 new jobs after May's disappointing 78,000. A strong report would cement expectations that the Federal Reserve isn't done raising U.S. interest rates, keeping the dollar attractive relative to its trading rivals. The dollar nudged 0.1% higher against the euro, with the euro worth $1.1912. On Tuesday, the euro was as at $1.1866, its weakest since May 2004. Europe's shared currency did bounce back when a German factory orders report showed a 2.7% month-on-month rise, topping the 1% gain expected. "The data continue to confirm our thesis that the lower euro is having a natural recuperative effect on the eurozone's export-driven industrial sector, but for now any positive European data is being ignored in favor of U.S. economic news," said Boris Schlossberg, currency analyst with Forex Capital Markets. The dollar was recently at 111.80 yen, or up 0.1% from where it stood late Tuesday. The dollar struck an 11-month high of 112.12 yen Tuesday before falling back. Oil's return to above $60 a barrel was weighing on the yen, which is seen particularly vulnerable to the impact on global consumer spending posed by expensive energy bills. The dollar also gained 0.1% against the British pound, with sterling changing hands at $1.7552. The pound pared a deeper decline on confirmation that London would host the 2012 Olympics. That news offset, for now, growing expectations that the next policy move at the Bank of England will be a cut to interest rates.

© 1999-2024 Forex EuroClub
All rights reserved