Article Highlights

  • Dollar bounces on positions adjustments before US jobs data
  • Dollar still seen stuck in a broader bear trend
  • US ADP employment data, comments by Fed officials awaited
  • Kiwi slips to 1-week low on lackluster local data
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The dollar clung to modest gains on Wednesday after bouncing from 15-month lows, benefiting from a pause in selling of the battered currency as investors begin positioning for key events this week, notably Friday’s U.S. employment report.

The U.S. currency was 0.1 percent higher at 110.490 yen , pulling away from a near seven-week low of 109.920 touched overnight.

The euro was unchanged at $1.1803 after being nudged away from a 2-1/2-year peak of $1.1846 set the previous day.

The dollar index against a basket of major currencies was steady at 93.039 after bouncing from 92.777, its lowest since May 2016.

The greenback has been weighed down by political turmoil gripping Washington and largely uninspiring U.S. economic data, which is adding to uncertainty about the pace of future Federal Reserve policy tightening.

“The dollar has already weakened significantly, especially against its European counterpart, reaching a point where some participants began buying back the currency ahead of Friday’s U.S. employment data,” said Shin Kadota, senior strategist at Barclays in Tokyo.

“But these are mere position adjustments before the U.S. jobs data and the bearish trend for the dollar still remains intact,” Kadota added.

The euro has gained about 12 percent against the dollar so far this year.

In addition to the political risks and monetary policy uncertainty that have plagued its U.S. peer, the common currency has drawn support from expectations that the European Central Bank would eventually begin phasing out its easy policy.

For potential impact on the dollar, the market awaited the U.S. ADP jobs report and comments by San Francisco Fed President John Williams and Cleveland Fed chief Loretta Mester due later in the session.

The Canadian dollar struggled after being hit by a slide in crude oil prices.

The loonie extended its overnight slide to trade at C$1.2545 , pulled further away from a 25-month high of C$1.2414 reached last week.

The Australian dollar, another commodity-linked currency, was down 0.1 percent at $0.7961.

The New Zealand dollar was down 0.5 percent at a one-week low of $0.7427 after data showed that the number of jobs created fell unexpectedly and wage inflation remaining tepid in the second quarter.