© Reuters.
Investing.com – The US dollar fell in early European trade on Friday, adding to sharp losses in the previous session after the US Congress approved a debt ceiling bill, while traders await the release of the widely watched monthly payroll.
At 02:55 AM ET (06:55 GMT), the greenback, which measures the greenback against a basket of six other currencies, was down 0.1% at 103.433 near a one-week low.
The index fell 0.6% on Thursday, its worst day in nearly a month, and is on track to drop 0.7% this week, which would be its worst week since mid-January.
The US Senate late Thursday passed legislation raising the government’s debt ceiling of $31.4 trillion, a day after the House of Representatives did the same.
The bill is now heading to the White House for President Joe Biden to sign into law, averting what would have been the first-ever default. The Treasury also warned it would not be able to pay all its bills on June 5 if Congress failed to do so. by then.
This news hit the dollar, which has been one of the main beneficiaries of the uncertainty due to its safe-haven status.
Attention now turns to the official US Gazette release later on Friday, which is expected to show that the world’s largest economy added 180,000 jobs in May.
The jobs report will be one of the last pieces of data before the Fed’s June meeting and could help determine whether a 14-month pause in interest rate hikes is approved.
That possibility seems to have increased over the past couple of days after both the President of the Federal Reserve Bank of Philadelphia and the Fed Governor came out in favor of such a move.
Elsewhere, it rose 0.1% to 1.0773, up to a one-week high after the European Central Bank chief signaled further gains even as a weaker-than-expected May report came out on Thursday.
“Inflation is very high and is set to stay that way for a long time,” Lagarde said Thursday in a speech in Germany.
Data released on Friday showed a rise of 0.8% month over month in April, above the expected growth of 0.3%.
This is a significant improvement over the previous month’s decline of 1.1% and indicates resilience in the eurozone’s second largest economy, something the European Central Bank will take into account.
It rose 0.1% to 1.2544, it rose 0.1% to 138.88, after falling as low as 138.44 on Thursday for the first time since May 24, while it rose 0.6% to 0.6611.
The Australian dollar was boosted by news that the country’s independent wage-setting body will raise the minimum wage by 5.75% from July 1, adding to inflation fears.
It meets next week, and that raised expectations for a quarter-point rate hike.