SINGAPORE — The dollar wobbled on Thursday after a trade agreement between the United States and Vietnam fuelled optimism over potential future deals ahead of a July 9 tariff deadline, while investors looked to payrolls to assess the Federal Reserve’s next steps.
Sterling firmed slightly after a sharp drop the previous session as British Prime Minister Keir Starmer’s office rushed to give Finance Minister Rachel Reeves his full backing, hoping to allay investor worries about Britain’s finances.
The pound dropped nearly 1 percent and British government bonds tumbled on Wednesday, as a tearful appearance by Reeves in parliament a day after the government backed down on its welfare reforms reignited concern over Britain’s finances.
The pound last fetched $1.3647, slightly higher in Asian hours, while the euro was steady at $1.1806, hovering close to the September 2021 top it touched earlier this week. The yen firmed a bit to 143.56 per dollar.
The dollar index, which measures the US currency against six other units, was at 96.701, still near the 3-1/2-year lows it has been rooted to this week. The index is on course for a 0.5 percent drop in the week.
Investor attention will be on the US Labor Department’s comprehensive employment report for June, due to be released on Thursday ahead of the July 4 holiday after data showed private payrolls fell for the first time in more than two years in June.
The ADP report released on Wednesday pushed traders to shift expectations of when the Fed will cut interest rates. Traders are pricing in 25 percent chance of the Fed moving in July versus 20 percent a day earlier, CME FedWatch tool showed.
