(Updates prices, adds cryptocurrency gains)
* Euro up 0.7%
* Dollar index down 0.5%
* Jobs report interrupts dollar run
* Year-to-date dollar index up 1.2%
By David Henry
NEW YORK, Feb 5 (Reuters) - The dollar lost out to the euro after Friday's U.S. jobs report
suggested that some traders may have over-played a stronger American recovery from the
coronavirus pandemic.
The euro EUR=EBS rose 0.7% to $1.2042 in its biggest daily gain in more than two months
after the report, which Marc Chandler, strategist at Bannockburn Global Forex, said did more to
force short-term traders to adjust long-dollar and short-euro positions than it changed the
economic outlook for a U.S. recovery that is stronger than peers.
The dollar index =USD of a basket of currencies was down 0.5% at 91.028, but still holding
a weekly gain of 0.6%.
"This forces some of the late dollar-longs out," Chandler said. "It doesn't really change
what to expect for Q1 GDP in the U.S. Market positioning is a different story."
The report showed U.S. employment growth rebounded less than expected in January and job
losses the prior month were deeper than initially thought, strengthening the argument for
additional relief money to aid the recovery from the COVID-19 pandemic. The greenback was off 0.1% against the yen JPY=D3 at 105.42.
The more modest change against the yen, Chandler said, was consistent with yields on
longer-term U.S. Treasuries edging up in reaction to the report and the support it gives for
additional government spending to stimulate the economy. The spread between yields on two-year and 10-year Treasuries, seen as an indicator of
economic expectations, widened to as much as 106 basis points and the most since May 2017.
U.S. President Joe Biden cited the report as he and his Democratic allies pushed ahead with
steps toward their $1.9 billion COVID-19 relief package, including a vote in the Senate and
another expected in the House. The moves aim to secure the spending before special unemployment
benefits expire on March 15. Expectations for more stimulus also drove global stocks to a new record on Friday, as
measured by MSCI's all-country world index .MIWD00000PUS . Oil, too, rose toward $60 a barrel and hit their highest prices in a year on the outlook for
an economic revival and supply curbs by producers. Aggressive stimulus fuels expectations of higher inflation and adds to the market's interest
in new consumer price data coming next week, analysts at ING wrote late on Friday. The impact on
the dollar could come through what the price data say about interest rates after subtracting
inflation, they said.
Analysts and investors have been weighing whether dollar strength this year has been a
temporary reaction to a 7% loss in 2020 or is a longer-lasting shift away from dollar pessimism.
The dollar index is still up 1.2% this year. Its rise has been supported by higher
longer-term U.S. Treasury yields, which prompted traders to position for massive fiscal
spending.
Cryptocurrencies bitcoin and ether BTC=BTSP ETH=BTSP appeared to benefit from the
dollar's fall on Friday, rising 2% and 7%, respectively.
Futures on ether, also known as ethereum, will begin trading on Sunday evening on the CME
derivatives exchange where bitcoin futures have traded since 2017.
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Currency bid prices at 3:06PM (2006 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 91.0280 91.5270 -0.53% 1.164% +91.6000 +91.0040
Euro/Dollar EUR=EBS $1.2042 $1.1961 +0.69% -1.43% +$1.2048 +$1.1952
Dollar/Yen JPY=D3 105.4150 105.5400 -0.15% +2.02% +105.7600 +105.3350
Euro/Yen EURJPY= 126.94 126.25 +0.55% +0.02% +126.9800 +126.1700
Dollar/Swiss CHF=EBS 0.8995 0.9044 -0.54% +1.67% +0.9045 +0.8993
Sterling/Dollar GBP=D3 $1.3728 $1.3673 +0.41% +0.49% +$1.3739 +$1.3666
Dollar/Canadian CAD=D3 1.2769 1.2824 -0.43% +0.27% +1.2832 +1.2765
Aussie/Dollar AUD=D3 $0.7668 $0.7601 +0.88% -0.32% +$0.7670 +$0.7583
Euro/Swiss EURCHF= 1.0832 1.0816 +0.15% +0.23% +1.0835 +1.0808
Euro/Sterling EURGBP= 0.8771 0.8749 +0.25% -1.86% +0.8777 +0.8739
NZ NZD=D3 $0.7199 $0.7157 +0.57% +0.24% +$0.7204 +$0.7136
Dollar/Dollar
Dollar/Norway NOK=D3 8.5300 8.6420 -1.17% -0.54% +8.6445 +8.5405
Euro/Norway EURNOK= 10.2744 10.3350 -0.59% -1.84% +10.3435 +10.2620
Dollar/Sweden SEK= 8.3744 8.4627 -0.32% +2.17% +8.4816 +8.3714
Euro/Sweden EURSEK= 10.0850 10.1170 -0.32% +0.09% +10.1410 +10.0836
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World FX rates https://tmsnrt.rs/2RBWI5E
Dollar on course for best week in 3 months https://tmsnrt.rs/3axHSYM
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