The dollar held just above a one-month low on Monday as traders held tight positions heading into a busy week that includes monthly U.S. jobs data and a key Australian central bank decision.
The dollar index, which measures the greenback against six major peers, stood at 92.091, almost unchanged from Friday, when it dipped as low as 91.775 for the first time since June 28.
The index dropped 0.88% last week, its worst performance since early May, after Fed Chair Jerome Powell reiterated mid-week that rate increases were “a ways away” and the job market still had “some ground to cover.”
Fed Governor Lael Brainard echoed those comments on Friday, saying “employment has some distance to go.”
The dollar index last month hit its highest since the start of April at 93.194 as traders positioned for a start to tapering as soon as this year.
Gold was down on Monday morning in Asia, as the dollar hovered near a one-month low. The health of the U.S. labor market is also on investors’ minds as they await the country’s latest job report.
Gold futures were down 0.27% to $1,812.35 by 1:31 PM ET (5:31 AM GMT), rolling over to the Dec 21 contract on Aug. 1. The yellow metal retreated from a two-week high on Friday as the dollar strengthened from a one-month low.
The dollar, which usually moves inversely to gold, inched down on Monday. It was down 0.8% during the previous week, its worst weekly performance in over two months.
The U.S. jobs report for July, including non-farm payrolls, will be released on Friday.
“The market is fearful of a stronger payroll data, which will make the dollar stronger… It will probably keep them from strapping on a lot of interest rate sensitive risks,” said Stephen Innes, managing partner at SPI Asset Management.
Oil prices fell on Monday on worries over China’s economy after a survey showed growth in factory activity slipped sharply in the world’s second-largest oil consumer, with concerns compounded by a rise in oil output from OPEC producers.
Brent crude oil futures slid by 74 cents, or 1%, to $74.67 a barrel by 0653 GMT, after dropping to a low of $74.10 earlier in the day.
U.S. West Texas Intermediate (WTI) crude futures dropped 70 cents, or 1%, to $73.25 a barrel after slipping to a session low of $72.77.
“China’s been leading economic recovery in Asia and if the pullback deepens, concerns will grow that the global outlook will see a significant decline,” said Edward Moya, senior analyst at OANDA.
“The crude demand outlook is on shaky ground and that probably will not improve until global vaccinations improve.”
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