The dollar is sliding after a massive miss on the US jobs figures - and has nearly erased all its gains for the year
dollarhas fallen sharply since US jobsfigures massively undershot expectations.
- The Fed's ultra-low US interest rates and rebounds in other countries are also hitting the greenback.
- Analysts broadly expect the dollar's weakness to continue as the global recovery picks up.
The dollar has fallen sharply in recent days and is now back close to where it began the year after a weak jobs report knocked confidence in the US recovery.
Many analysts now expect the dollar's weakness to continue, as recovering economies around the world draw investment away from the US, and the
The gauge was close to the 89.93 level of the start of January, having reversed almost all of the gains made in February and March when the US economy roared ahead of other advanced countries and the index peaked at a four-month high of 93.44.
It suffered its biggest one-day fall since November on Friday, when
The "horrible" undershoot led to a rally in speculative assets such as stocks and a weaker dollar, in large part because investors now expect the Fed to keep interest rates low for longer, John Hardy, head of FX strategy at Saxo Bank, said. Lower rates typically weigh on a currency, as they make investments in that country less attractive.
"That's the knee-jerk reaction in the modern era of maximum central bank and now fiscal support at every misstep for the economy," he said.
A strong economic recovery in other parts of the world is also likely to weigh on the greenback in the months ahead, JPMorgan analysts said in a note, by causing a "temporary time-out for US exceptionalism." The bank recommended clients reduce their exposure to the dollar.
Traders will be focused on the consumer price index
Typically, a sharp rise in inflation would cause the Fed to raise rates, thereby boosting the dollar.
But George Saravelos, Deutsche Bank's global head of FX research, said the Fed is more focused on
"The Fed is being driven by America's severely under-performing 'labor gap', not the market's focus on the 'output gap'," he said. "Last week's payrolls report should prove a catalyst for the market to come to terms with this dynamic and opens the door to further dollar weakness."
- More than $100,000 raised for loyal Burger King employee of 27 years in GoFundMe campaign after video shows him getting 'goody' bag as reward
- 'Get your boy Elon in line:' Former NASA official says she was ridiculed for supporting SpaceX in new memoir
- India is betting on casinos, online games and horse races to fill its coffers
- Indian power crisis is far from over as global coal prices surge
- 200 Indian companies register for extended producer responsibility for plastic packaging
- Tata Steel, Bajaj Auto, Bank of Baroda among stocks to watch out for on June 28
- Best voltage stabilizers for home in India
- Asus teases the ROG Phone 6 gaming phone — confirmed to feature IPX4 splash-resistance