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Dollar edges lower in thin trade, but remains supported

ForexNov 11, 2015 10:57
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© Reuters. Dollar slips lower vs. rivals but remains within close distance of 7-month peak - The dollar edged lower against the other major currencies on Wednesday, but remained close to a seven-month peak as growing expectations for a U.S. rate hike before the end of the year continued to support the greenback.

Trading volumes were expected to remain thin on Wednesday with no major U.S. data expected throughout the day.

USD/JPY slipped 0.20% to 122.90, still close to Friday's three-month highs of 123.61.

The greenback remained supprted as last week's strong U.S. employment data paved the way for the Federal Reserve to raise interest rates at its December meeting.

The Labor Department reported on Friday that the U.S. economy added 271,000 jobs last month, well ahead of expectations of the 180,000 expected by economists and the largest increase since December.

The unemployment rate fell to a seven-and-a-half year low of 5.0%.

EUR/USD was little changed at 1.0732, off the previous session's seven-month trough of 1.0672.

The euro remained under pressure after Reuters reported on Monday that the European Central Bank could cut its deposit rate deeper into negative territory at its December meeting.

Elsewhere, the dollar was lower against the pound and the Swiss franc, with GBP/USD up 0.47% at 1.5190 and with USD/CHF shedding 0.21% to 1.0044.

Earlier Wednesday, the Office for National Statistics said the unemployment rate fell to 5.3% in the three months to September, the lowest since the three months to April 2008. Economists had expected the jobless rate to remain unchanged at 5.4%.

The number of people claiming unemployment benefits rose by 3,300 in October, compared to expectations for an increase of 1,500.

Wage growth including bonuses rose by 3.0% in the three months to September, the ONS said, matching the increase in the previous three month period and below forecasts for rise of 3.2%.

Excluding bonuses, wages rose by 2.5%, below expectations for 2.7% after a 2.8% increase in the three months to August.

The Australian and New Zealand dollars were stronger, with AUD/USD rising 0.34% to 0.7054 and with NZD/USD gaining 0.35% at 0.6553.

In its biannual Financial Stability Report, the Reserve Bank of New Zealand said "there is less scope for monetary policy easing to offset a sharp rise in funding spreads," lending support to the kiwi.

At the same time, the Westpac Banking Corporation reported that Australia's consumer sentiment rose 3.9% this month, after an increase of 4.2% in October.

Meanwhile, USD/CAD was little changed at 1.3271, still within close distance of Friday's one-month peak of 1.3316.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.16% at 99.11, still close to Tuesday's seven-month highs of 99.60.

Dollar edges lower in thin trade, but remains supported

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