Dollar finds support from jobs data

Published: 27 Sep at 9 AM Tags: Euro, Dollar,

The US dollar has recovered from earlier losses to make broad gains after jobs data was stronger than expected. This has supported expectations by the markets that the Federal Reserve will soon begin to draw in its bond-buying stimulus programme.

However, the greenback could still come under some pressure as there are still concerns that there could be a government shutdown next week and investors are remaining cautious about the possibility of default. The dollar index has gained 0.3 per cent to 80.574. The US currency was given a boost after weekly figures showed better than expected jobless claims.

Earlier this month jobless data suggested that the US economy may be faltering causing the Fed to declare that stimulus measures would remain in place. Many analysts believe that the central bank could now begin tapering as soon as the end of October when the next Fed policy meeting is scheduled.

The euro has dropped 0.3 per cent to $1.3482 on the back of political uncertainty in Italy. Several supporters of Silvio Berlusconi, former Prime Minister of Europe’s third biggest economy, have threatened to resign if a tax fraud conviction means their leader is removed from parliament.

The dollar has risen 0.5 per cent to hit 98.92 yen after earlier reaching a high of 99.13 yen.