USD Trades with Downside Bias

The dollar has traded with a downside bias so far this week, posting losses versus the yen and Australian and New Zealand dollars, while managing to recoup modest intraday losses versus the euro.

EUR/USD ebbed back toward the 1.2300 level after lifting to a two-session high of 1.2340.

Action Economics said Friday’s “just right” US jobs report — strong jobs but soft average earnings — along with the cooling of tensions on the Korean peninsular have fed a risk-on vibe in global markets. That has weighed on the dollar, despite firming expectations for the Federal Reserve to make four 25-basis-point rate hikes by the end of the year.

USD/JPY dipped below Friday’s low in making 106.35 before rebounding above 106.50. Action Economics said the market was rocked a little by demands for the resignation of Japan’s finance minister, Taro Aso, who subsequently said that he would stand his ground. The intrigue is linked to a political scandal involving a sale of state land.

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