Dollar takes pause in rate-driven climb
Dollar dipped slightly against euro Monday after soaring on last week's blockbuster US jobs report.
NEW YORK (AFP) - The dollar dipped slightly against the euro Monday after soaring on last week s blockbuster US jobs report that firmed the case for a Federal Reserve interest rate increase this year.
The official data last Friday showed the strongest US job growth of the year in October, rebounding from a two-month weak patch, pushing the odds of a Fed rate hike in December up sharply.
The dollar slipped against the euro, which bought $1.0748 around 2200 GMT, compared to $1.0742 at the same time Friday. Against the Japanese currency, the greenback inched up a bit, to 123.19 yen from 123.16 yen.
"Markets paused to take stock and profit in the dollar s latest winning streak which coaxed it a little under fresh six-month highs against the euro and a currency basket," said Joe Manimbo of Western Union Business Solutions.
"Market focus on monetary policies that are expected to loosen in Europe and tighten in the US suggests more open road for the dollar to run over the foreseeable future," he said.
The greenback has been benefiting from the diverging policies of central banks as the Fed anticipates raising its benchmark federal funds rate from near zero, where it has been parked since December 2008.
Other central banks, such as the European Central Bank and the Bank of Japan, are on an easing course to boost faltering economic growth.
Manimbo pointed out that the euro has lost about 6.5 percent of its value against the dollar since mid-October, which can help battle tepid inflation in the 19-nation eurozone by pushing up the cost of imported goods.
"If sustained, a weaker euro suggests the European Central Bank might not have to go as aggressively in strengthening stimulus, a view that could help ease headwinds on the euro."
