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Dollar resumes downward path Neil Dennis The dollar resumed its downward path on Friday after Thursday’s brief rally, which followed sharp losses on equity markets and a widespread flight to more liquid assets. Although European stocks were down again on Friday, the dollar gained scant benefit as investors remained cautious of backing the US currency ahead of non-farm payrolls data, the keenly-watched measure of US jobs creation. ”Expectations are for a reading around the 90,000 mark but anything much below this - or a downward revision on the previous month’s figure - could readily initiate further dollar selling in the near term,” said James Hughes at CMC Markets.
The dollar tested recent lows, hitting $1.4488 against the euro - a shade off its $1.4503 low, hit on Wednesday after the Federal Reserve cut US interest rates by 25 basis points to 4.5 per cent. By late morning the euro was up 0.4 per cent to $1.4477. Sterling was a whisker away from its 26-year high of $2.0869 after expectations of a rate cut in the UK were dented by hawkish comments this from the Bank of England’s chief economist Charles Bean. Mr Bean said policymakers could not afford to lower their guard against inflation. By late morning in London, the pound was trading 0.2 per cent higher at $2.0832, having been as high as $2.0862. The yen was weaker after Japanese equity markets fell sharply in response to Thursday’s sharp losses on Wall Street.
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