By Samuel Indyk and Jiaxing Li <\/p>\n
LONDON, July 3 (Reuters) – The U.S. dollar fell towards its biggest weekly loss in 12 weeks on Friday after a tepid U.S. jobs report cooled market expectations for a near-term Federal \u200cReserve interest rate hike, providing some relief for the embattled Japanese yen. <\/p>\n
Broad dollar weakness lifted the euro to \u200cnear a two-week high at $1.1472, up 0.6% on the week, while sterling firmed to $1.3380 for a 1.2% weekly gain, its best in nearly three months. <\/p>\n
That also \u200boffered some respite for the Japanese yen, pushing it back above 161 per dollar, but markets remained nervous about intervention risks after a sudden jump on Thursday lifted the currency from a 40-year low of 162.84. <\/p>\n
U.S. JOBS GROWTH SLOWS <\/p>\n
The dollar took a hit after U.S. job growth slowed sharply in June and payroll gains for the prior two months were revised lower, prompting traders to pare bets \u200con a near-term Fed rate rise. <\/p>\n
Markets are now \u2060pricing in about a 35% chance for a hike at the September meeting, according to LSEG data, down from 55% prior to the data. U.S. Treasury yields also pulled back from earlier highs, \u2060with those on interest rate sensitive 2-year notes snapping a three-day streak of gains with a 4 basis-point drop. <\/p>\n
“We don’t have a hike in our forecast, so this was in line with our views that we would get a turnaround here eventually and a weaker dollar,” \u200bsaid \u200bKarl Steiner, head of analysis at SEB. “I wouldn’t be surprised if we \u200bsee some more downside.” <\/p>\n
The dollar index, which measures \u200cthe greenback against a basket of currencies including the yen and the euro, was roughly 0.3% lower at 100.68 after a 0.5% dip on Thursday. It is now down 0.7% for the week, the biggest weekly drop since early April. <\/p>\n
YEN INTERVENTION FEARS LINGER <\/p>\n
Although the yen has clawed back from 40-year lows, investors remained on high alert for possible intervention during a holiday-thinned session with U.S. markets closed for Independence Day. <\/p>\n
“You have to have it on the radar,” said SEB’s Steiner, referring to the possibility of intervention. “Historically \u200cthey have preferred to do it whenever there is lower liquidity.” <\/p>\n
Japan issued \u200ba fresh warning to currency markets on Friday as Finance Minister Satsuki \u200bKatayama said Tokyo was in regular contact with Washington \u200bon foreign exchange issues and remained ready to support the yen. Japan’s Chief Cabinet Secretary Minoru Kihara \u200csaid they were closely monitoring market movements with a \u200bhigh sense of urgency. <\/p>\n
Markets are concerned \u200babout Japanese officials abandoning their habit of telegraphing risks, instead signalling a more targeted campaign to squeeze speculators and raise the cost of betting against the battered yen. <\/p>\n
“The bigger question is what comes next,” said Tony Sycamore, an \u200banalyst at IG, pointing to the 162.83 \u200clevel as a short-term top for dollar-yen. <\/p>\n
“Whether it becomes a more meaningful medium-term high will ultimately depend on incoming \u200bU.S. data and, to some degree, developments in the Japanese government bond market.” <\/p>\n
(Reporting by Samuel Indyk and \u200bJiaxing Li; Editing by Kevin Buckland, Jamie Freed and Alex Richardson) <\/p>\n","protected":false},"excerpt":{"rendered":"By Samuel Indyk and Jiaxing Li LONDON, July 3 (Reuters) – The U.S. dollar fell towards its biggest…\n","protected":false},"author":2,"featured_media":524154,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[7255,239754,42,114853,43,40,38,41,39],"class_list":["post-524153","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-currency-markets","tag-federal-reserve-interest-rate-hike","tag-headlines","tag-japanese-yen","tag-news","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/524153","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=524153"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/524153\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/524154"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=524153"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=524153"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=524153"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}