The dollar struggled to gain a foothold on Monday and was languishing at five-month lows as traders looked past stronger than anticipated U.S. jobs data, while growing hopes of China reopening boosted risk sentiment.
The dollar index, which measures the currency against six major peers including the yen and euro, was down 0.18% at 104.28, its lowest since June 28. The index fell 1.4% last week.
The dollar initially jumped on Friday after U.S. data showed that employers added 263,000 jobs in November, well above estimates of 200,000, but gave up the gains as traders booked profits, with some of the Fed speakers allaying market concerns.
“We move past U.S. payrolls with only a momentary shake for risky markets,” said Chris Weston, head of research at Pepperstone, noting that the data supported the ‘soft landing’ argument and is unlikely to change the Fed’s course, where a 50 basis point hike next week is still the firm default position.
“With limited data to drive this week and no Fed speakers, the market may start to think for itself and look at massaging exposures ahead of next week,” Weston added.
Investor focus will firmly be on the U.S. consumer price inflation data due on Dec. 13, one day before the Fed concludes its two-day meeting.