High volatility returned to impose on the dollar during early trading, as investors awaited US jobs report later in the day which is expected to support expectations of Federal Reserve interest rates raise next meeting.
A surprisingly robust from ADP report, boost speculation that the US jobs report today will give the Federal Reserve more reason to raise interest rate benchmark at its next meeting on March 14-15.
Polls show that US economy will create 190,000 jobs in non farm sector on February, less than the reading in December 227,000 jobs, with the expectations of the average hourly earning growth of 0.3 compared to the decline in the previous month's -0.3%.
At 04:15 GMT, US dollar index (USDIX) fell 0.3% at 101.90.
The dollar needs at least the jobs report to comes close of expectations, in order to enhance the rally of the dollar to new tops, but the bad scenario if the report comes less than exception, this is what will cause a sharp decline on the dollar, the fact that 90% of participants in markets believe that the report will come close to or higher than expectations.
The dollar rose against the Japanese yen by 0.3% to new high levels at 115.20, the yen is still under the influence of the stronger dollar amid growing expectations to raise interest rate next week, positive expected US employment data increase negative pressure on yen.
The euro rose 0.1% to 1.0590, supported by governor of the European Central Bank Mario Draghi's comments yesterday, signals to remove all accommodative measures available to support growth and inflation, because the sense of urgency is not there.
Draghi yesterday raised the outlook for growth and inflation, pointing to the possibility of a gradual exit from the quantitative easing policies, and begin to raise its interest rates is likely to be at the end of this year, so the ECB will continue to monitor economic data closely.
Draghi's comments yesterday give the euro strength of the recovery, or at least trading within the ranges in the short and medium term, but the trend is still bearish amid uncertainty surrounding the future of economic growth in the euro area, and with the political risks of the elections in the Netherlands and France.
Pound Closed yesterday trading at the opening price 1.2163, and with a narrow trades since this morning, thanks to this stability to the positive comments from Draghi, but this stability will not last long with waiting for the manufacturing production figure on February, which is expected to show sharply fall to -0.6% from 2.1%, and this is what makes the chances of recovery or stability weak during the day, especially with the positive awaited US data .
The pound steady against the dollar close to its lowest level in two weeks at 1.2155.
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