# Dollar rebound holds as yields steady ahead of jobs data
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-08-04
Category: TRADING
Category URL: https://financedigest.com/category/trading
Meta Title: Fed Official Suggests Quick Support Reduction; Dollar Surges
Meta Description: Read about the latest developments in the dollar's value as Fed officials hint at potential changes to economic support measures. Stay informed with
URL: https://financedigest.com/dollar-rebound-holds-as-yields-steady-ahead-of-jobs-datahtml

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By David Henry

NEW YORK (Reuters) – The dollar held gains on Wednesday after a quick recovery from an earlier fall as markets chose to focus on a suggestion from a top U.S. Federal Reserve official that the central [bank may reduce support for the improving economy](https://www.financedigest.com/bank-of-canada-seen-on-hold-even-as-economy-accelerates.html "Bank of Canada seen on hold even as economy accelerates") more quickly than widely thought.

The bullish comments on the U.S. economy, by Fed Vice Chair Richard Clarida, triggered a rebound in U.S. [Treasury yields](https://www.financedigest.com/wall-st-flutters-treasury-yields-ease-as-powell-resumes-testimony.html "Wall St flutters, Treasury yields ease as Powell resumes testimony") and turned market attention away from the release two hours earlier of an unexpectedly weak private employment report that had driven the dollar down.

The dollar swung from being down 0.3% for the day to up 0.3%on the opposing clues on whether the United States will see strong economic [growth and higher interest rates](https://www.financedigest.com/u-s-job-growth-powers-ahead-unemployment-rate-at-3-4.html "U.S. job growth powers ahead; unemployment rate at 3.4%") or a serious drag from the coronavirus pandemic.

The ADP National Employment Report was [seen as possibly foreshadowing softness in July jobs](https://www.financedigest.com/icrc-to-cut-some-1500-jobs-as-humanitarian-budgets-seen-sliding.html "ICRC to cut some 1,500 jobs as humanitarian budgets seen sliding") data due on Friday. But there were doubts about its value as a predictor and another report showed U.S. service industry activity [jumping to a record](https://www.financedigest.com/nintendo-shares-jump-5-on-record-splatoon-launch.html "Nintendo shares jump 5% on record ‘Splatoon’ launch") high in July.

The currency markets have been expecting Friday’s non-farm payrolls report to be the [next big](https://www.financedigest.com/finance-is-the-next-big-sector-to-be-ubered.html "Finance is the next big sector to be Uber’ed") catalyst for exchange rates, followed by comments expected at a symposium of central bankers at the end of this month in Jackson Hole, Wyoming.

In the afternoon in New York, the [dollar index against major currencies](https://www.financedigest.com/u-s-dollar-advances-vs-major-currencies-as-risk-appetite-fades.html "U.S. dollar advances vs major currencies as risk appetite fades") was up 0.2% to 92.246.

The Japanese yen, often seen as a competing safe haven, was a big beneficiary of the dollar’s initial fall on the ADP report and [gained](https://www.financedigest.com/dollar-trims-gains-vs-euro-after-u-s-inflation-data.html "Dollar trims gains vs euro after U.S. inflation data") to 108.77 per dollar, but couldn’t hold its break below 109. The [dollar was last trading at 109.45 yen](https://www.financedigest.com/aussie-dollar-firm-as-bonds-tumble-yen-looks-past-boj.html "Aussie dollar firm as bonds tumble, yen looks past BOJ"), up 0.4%.

The [euro and British pound](https://www.financedigest.com/dollar-slips-after-upbeat-china-data-euro-pound-rise.html "Dollar slips after upbeat China data; euro, pound rise") also swung against the greenback. The euro was last trading at $1.1840, off 0.2% for the day. Sterling was down 0.2% to $1.3889.

The initial downdraft came when the ADP report showed U.S. private payrolls [increased about half as much as economists had expected](https://www.financedigest.com/polyimide-fibers-market-is-expected-to-increase-at-a-healthy-cagr-of-around-5-over-the-forecast-period-of-2021-2031.html "Polyimide Fibers Market is expected to increase at a healthy CAGR of around 5% over the forecast period of 2021-2031"), likely constrained by shortages of workers and raw materials.

“It was a fairly big disappointment,” said Mazen Issa, senior currency strategist at TD Securities.

The ADP report has a mixed record of predicting the [government](https://www.financedigest.com/european-governments-spend-half-a-trillion-euros-on-energy-crisis-report-2.html "European governments spend half a trillion euros on energy crisis – report") report, Issa said, but added, “the miss is substantial enough that the markets may be a little bit more nervous going into Friday’s report.

Federal Reserve Chair Jerome Powell and other policy makers have recently emphasized that upcoming employment [reports will be critical to the board’s decisions about when and how to cut back](https://www.financedigest.com/its-back-to-school-for-investors-as-uk-student-accommodation-less-vulnerable-to-brexit-shock-reports-jll.html "It’s back to school for investors as UK student accommodation “less vulnerable to Brexit shock” reports JLL") on support for the economy.

Fed policy maker Robert Kaplan told Reuters on Wednesday that more “progress” in the July and August [jobs reports would be reason to start pulling back on bond purchases “soon.”](https://www.financedigest.com/meta-plans-to-cut-thousands-of-jobs-as-soon-as-this-week-bloomberg-news.html "Meta plans to cut thousands of jobs as soon as this week – Bloomberg News")

The [dollar has lost value in recent weeks](https://www.financedigest.com/dollar-dips-ahead-of-inflation-data-later-this-week.html "Dollar dips ahead of inflation data later this week") as declining yields made strategists question whether the U.S. [economy will grow](https://www.financedigest.com/euro-zone-economy-faces-growing-risk-of-recession-survey-shows.html "Euro zone economy faces growing risk of recession, survey shows") as much as they had expected in light of the spread of the highly contagious Delta variant of COVID-19.

Ether, the second-largest cryptocurrency, rose 7% to $2,690 ahead of an upcoming change in the Ethereum [blockchain network that will take some tokens](https://www.financedigest.com/the-gibraltar-blockchain-exchange-announces-public-token-sale-event-to-create-world-leading-licensing-and-regulation-standards-in-the-industry.html "The Gibraltar Blockchain Exchange Announces Public Token Sale Event To Create World Leading Licensing and Regulation Standards In The Industry") out of circulation.

Bitcoin rose 4% to $39,640.

========================================================

Currency bid prices at 3:14PM (1914 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index

92.2460 92.0360 +0.24% 2.517% +92.3110 +91.8140

Euro/Dollar

$1.1840 $1.1865 -0.21% -3.09% +$1.1899 +$1.1833

Dollar/Yen

109.4500 109.0300 +0.39% +5.94% +109.6700 +108.7250

Euro/Yen

129.58 129.35 +0.18% +2.10% +129.8100 +129.1500

Dollar/Swiss

0.9062 0.9041 +0.25% +2.45% +0.9076 +0.9019

Sterling/Dollar

$1.3889 $1.3914 -0.18% +1.67% +$1.3957 +$1.3889

Dollar/Canadian

1.2549 1.2535 +0.12% -1.45% +1.2562 +1.2516

Aussie/Dollar

$0.7381 $0.7393 -0.14% -4.02% +$0.7426 +$0.7370

Euro/Swiss

1.0728 1.0726 +0.02% -0.73% +1.0740 +1.0724

Euro/Sterling

0.8522 0.8529 -0.08% -4.64% +0.8532 +0.8506

NZ

Dollar/Dollar $0.7045 $0.7019 +0.41% -1.86% +$0.7088 +$0.7018

Dollar/Norway

8.8365 8.8215 +0.15% +2.89% +8.8480 +8.7780

Euro/Norway

10.4630 10.4650 -0.02% -0.04% +10.4778 +10.4180

Dollar/Sweden

8.6058 8.5979 -0.15% +4.99% +8.6126 +8.5666

Euro/Sweden

10.1894 10.2049 -0.15% +1.12% +10.2130 +10.1838

(Reporting by David Henry in New [York and Iain Withers in London; editing by Kirsten Donovan and Sonya Hepinstall)](https://www.financedigest.com/new-york-holds-top-spot-london-second-in-z-yen-financial-centre-survey.html "New York holds top spot, London second in Z/Yen financial centre survey")


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