U.S. Dollar Drops Strongly on Fed Timing

The dollar weakened the most in more than 12 months, dropping from a four-year high, as uneven U.S. labor-market data refueled the debate over when the Federal Reserve will raise interest rates.

The greenback depreciated versus most of its 31 major peers, with Brazil’s real climbing the most in three years as President Dilma Rousseff faces a runoff against surprise second-place candidate Aecio Neves. The yen strengthened from almost its weakest since 2008 before the Bank of Japan’s policy decision tomorrow. South Africa’s rand gained the most in almost four months after Deputy Reserve Bank Governor Lesetja Kganyago was announced to lead the central bank.

“In our view, it’s just a minor pull back,” Matthew Derr, a foreign-exchange strategist at Credit Suisse Group AG, said by phone from New York. “We saw the move on Friday really kick in after payrolls and it seems like the following few days are just consolidation of that.” U.S. employers added more jobs than forecast in September, data released Oct. 3 showed.

Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.