Forex — Dollar Trims Gains But Remains Broadly Supported

Dollar pulls from the session highs, but U.S.-supported data — The dollar trimmed gains against other major colleagues on Friday, but the greenback remained in the immediate vicinity of a 10-week high, after data showed that the US dropped the unemployment rate and wages grew more-than-expected last month, although the labour market unexpectedly fell.

Optimism about the strength of the economy was intact, after the release of mixed U.S. employment report on Friday, as the markets seemed to exclusively focus on the promotion of wage growth.

The increase of wages is being closely watched by the Federal Reserve for evidence of diminishing slack in the labour market and rising pressure on inflation.

The data seemed to support the expectations for a December rate hike by the Fed, was the strengthening of the US dollar in recent sessions.

The dollar was also largely supported by hopes of an impending tax overhaul, according to the U.S. house of representatives on Thursday 2018 expenditure approved invoice, that was an important step to advance a tax reform plan.

EUR/USD high-0.14% pressed to 1.1727, easing off a seven-week low of 1.1670, as the political tensions somewhat ease seemed to be in Spain, after the government apologized on Friday for the violent police crackdown that followed Catalonia’s independence referendum.

The apology came a day, to close after the Spanish constitutional court ordered the regional government of Catalonia, on Monday, increasing the doubts about the question of whether the region will be able to declare independence.

GBP/USD fell 0.50% to trade at a four-week low of 1.3089 amid growing concern about a possible leadership battle in the UK following threats by a former Conservative party Chairman request the support of 30 legislators to topple the British Prime Minister, Theresa May.

The yen and the Swiss franc trimmed losses but remained under pressure, with USD/JPY up to 0.22% 113.04 and with USD/CHF 0.13% add to 0.9798.

The Australian and New Zealand dollars were weaker, with AUD/USD down 0.55% at 0.7754 and NZD/USD retreating 0.45% to 0.7083.

Meanwhile, USD/CAD 0.14% went back to 1.2547, pulling away from a five-week high of 1.2595 hit earlier in the day, after Statistics Canada said the number of employed rose by 10,000 in September, confounding expectations for a rise of 14,500.

The unemployment rate remained unchanged at 6.2% last month, compared to expectations for an increase of 6.3%.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was stable at a level of 93.72 to 10:50 a.m. ET (14:50 GMT), from a 10-week high of 94.09 hit earlier.

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