Dollar Pauses for Breath as Firming Fed Bets Push up Yields

The dollar took a breather on Monday after surging to a seven-month high, while emerging, commodity and bond markets were jittery after strong U.S. jobs data boosted bets for a December rate hike by the U.S. Federal Reserve.

European and Asian shares both started the week in a subdued mood as a fresh batch of soft Chinese trade data added to the uncertainty surrounding what is increasingly expected to be the Fed’s first hike in almost a decade.

By contrast, Tokyo’s Nikkei index leapt 2 percent as the yen fell sharply against the dollar, and hopes for more stimulus following weak data from Beijing saw Chinese stocks jump 1.5 percent, but they were exceptions.

Wall Street was expected to start 0.3 percent lower while a solid rebound in German exports failed to prevent traders in Europe cashing in some profits after bourses there hit 2-1/2 month highs last week.

Reuters

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Craig Erlam

Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam