By Peter Nurse
The dollar has stabilized in early european trade Friday, following the sharp rise in employment in the United States and before the last meeting of the federal Reserve.
At 11.10 am, the dollar index, which tracks the greenback against a basket of six other currencies, remained almost unchanged at 96,888, after having fallen by almost 3 % over the last month. The USD/JPY has fallen 0.1 % to 109,48.
The dollar has been supported by a surprising job in the United States in may, after the economy has suffered job losses record high in April, showed the data of Friday.
The unemployment rate also fell to 13.3% last month, after having reached in April, a peak of 14.7 % after the Second world War, which gives hope that the world’s largest economy is beginning to stabilize after the pandemic has triggered a wave of job cuts.
That said, investors may avoid making large transactions before the end of the federal Reserve meeting on Wednesday.
EUR/USD is traded at 1,1294, up 0.1 %, just below its highest level in nearly three months, after German industrial output dropped 17.9% in April, a record, before a gradual thawing of restrictions blocking does not trigger a recovery still too slow.
The euro has been boosted by the decision taken on Thursday by the european central Bank to increase its bond purchase program of the emergency to 1.35 trillion euros, more than expected.
The pound sterling has also continued to make progress Monday, with a 0.2% increase in the GBP/USD 1,2685, after exceeding the 1.27 for the first time since the beginning of march.
However, the book could still gain ground, after the fourth round of negotiations on the future relations between the EU and the United Kingdom has concluded on Friday without a major breakthrough.
“We still believe that it is too early for the two parties reach an agreement, and we expect, therefore, that investors are reassessing soon the premium of risk of Brexit without agreement”, said the analysts of the Danske Bank, in a research note.