The dollar fell against other major currencies

08.09.2015

The dollar fell against other major currencies in Tuesday trading amid uncertainty about the future of the Fed decision whether the bank will begin to raise interest rates at its meeting later this month.

The dollar fell against the euro; EUR/USD rose 0.18% to 1.1190.

Sentiment on the dollar remain volatile, as Friday's report on US non-farm payrolls failed to clarify the likelihood of raising rates by Fed in the near future.

The Labor Department reported that the US had created 173 000 jobs last month, which was the smallest increase in the number of employees in five months, confounding forecasts about an increase of 220 000, while the unemployment rate fell to 5.1%, its lowest level since April 2008.

Meanwhile, the single currency gained support after last week's European Central Bank indicated that it could expand the current QE program amid increased risks to achieve the inflation target in the region due to the slowdown in the Chinese economy and the fall in oil prices.

The dollar rose against the yen; USD/JPY pair rose 0.43% to 119.78.

Demand for the yen as a safe-haven currency strengthened after data showed that China's exports fell 5.5% compared with a year earlier, though less predicted decline of 6.0%, while imports declined 13.8%, significantly more than the expected decline of 8.2%.

The slowdown in domestic demand indicates that the economic recovery remains weak and might need further stimulation from the government.

In Japan, on Tuesday, data showed that GDP in the second quarter decreased by 0.3%, less than the expected decline of 0.4%.

A separate report showed that the surplus of the current account balance of Japan in July reached 1.809 trillion yen, more than the expected 1.715 trillion yen.

The dollar fell against the pound, GBP/USD increasing by 0.66% to 1.5379, but rose against the Swiss franc, the USD/CHF pair going up by 0.34% to 0.9783.

The Australian and New Zealand dollars rose; AUD/USD jumped by 1.10% to 0.6999 and the pair NZD/USD rose 0.99% to 0.6321.

Earlier, the National Bank of Australia reported that the index of business confidence in Australia fell to 1 in the last month, from 4 in July, confounding the expected decline to zero.

Meanwhile, the USD/CAD pair fell 0.47% to 1.3245.

The USD index, showing the relationship of the US dollar against a basket of major currencies, was kept unchanged at 96.09, the low of September 4.

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