TOKYO- The dollar languished near a more than two-month low versus major peers on Monday as investors continued to assess the implications for monetary policy of a disappointing US employment report, ahead of inflation data this week.
The US created only a little more than a quarter of the jobs that economists had forecast last month and the unemployment rate unexpectedly ticked higher, pouring cold water on speculation the pandemic recovery could spark faster inflation that the Federal Reserve anticipates.
The dollar index, which measures the greenback against six rivals, stood at 90.178, after dipping as low as 90.128 for the first time since Feb. 26.
Notably, the British pound rallied 0.3 percent, rising as high as $1.4036 for the first time since Feb. 25, despite Scotland’s leader saying another referendum on independence was inevitable after her party’s resounding election victory.
“The USD’s choppy downtrend can continue this week,” Commonwealth Bank of Australia strategist Kim Mundy wrote in a client note, predicting a break above $1.22 for the euro.
“The unexpected slow recovery in the US labor market reinforces the FOMC’s patient approach to monetary policy,” while “the improving global economic outlook is a medium-term weight on the USD.”
The euro rose 0.1 percent to $1.2172, earlier touching the highest since Feb. 26 at $1.2177.
The dollar was little changed at 108.57 yen, not far from its lowest since April 27.
The Aussie dollar ticked 0.1 percent higher to $0.78535, close to Friday’s more-than-two-month high of 0.7863.
