Dollar holds modest gains after U.S. jobs report, Brexit in focus

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The dollar retained modest gains on Monday after a U.S. jobs report put to bed fears of a sharper slowdown in the world’s largest economy.

The closely watched data released on Friday showed nonfarm payrolls rose by a solid 196,000 in March, topping expectations and giving riskier assets a much-needed lift.

The dollar index against a basket of six major currencies was little changed at 97.383 after edging up 0.1 percent on Friday.

The greenback’s gains were limited as some components of the U.S. employment report suggested the economy wasn’t firing on all cylinders.

Wage gains had slowed in March, with average hourly earnings rising a modest 0.1 percent after jumping 0.4 percent in February. The moderation in wage growth supported the Federal Reserve’s decision to suspend further interest rate increases this year.

“The Fed can neither cut or hike rates in light of Friday’s jobs report, which does not provide the dollar with decisive incentive,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

“The Sino-U.S. trade talks don’t look to end any time soon and market focus will drift to Europe this week, as Brexit nears its next milestone on April 12.”

U.S. and Chinese negotiators wrapped up their latest round of trade talks on Friday and were scheduled to resume discussions next week to try to secure a pact that would end a months-long tit-for-tat tariff battle.

Britain’s departure from the European Union looms on April 12, but Prime Minister Theresa May has asked Brussels to postpone the exit until June 30 with little progress being made towards the departure.

The pound slipped to a one-week low of $1.2987 on Friday as France and the Netherlands expressed doubt about May’s plan to further delay Brexit.

Sterling last traded at $1.3037, little changed on the day.

The euro was flat at $1.1218 after dipping slightly against the dollar on Friday.

Against the yen, the dollar was a shade lower at 111.65 yen after popping up to a three-week high of 111.825 on Friday following the U.S. jobs report.

The Australian dollar dipped 0.15 percent to $0.7095 in the wake of declining prices of commodities such as copper.

Source: Reuters

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