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Dollar Steadies after Losses on Payrolls

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The dollar steadied against major currencies on Monday as traders waited for more data on the U.S. economy, after a disappointing jobs report last week ended a rally in the greenback.

The euro was little changed against the dollar, after data showed German industry avoided a contraction in December. Despite coronavirus lockdowns at home and abroad, demand from China helped exportoriented manufacturers in Europes largest economy weather the COVID19 pandemic.

Speculators have been reducing short positions in the dollar, but some analysts say better U.S. economic data and continued progress in fighting the COVID19 pandemic will be needed for further dollar gains.

Although much of the optimism towards U.S. macro is probably well founded, it is less apparent this will come to the data …, said Kristoffer Kjær Lomholt, chief analyst, FX and rates strategy at Danske Bank.

Indeed, the U.S. jobs recovery has more or less stalled, and that did leave some space to take EURUSD higher. The next big theme that may be priced further in to spot is moving ahead with U.S. fiscal talks.

Against the euro, the dollar traded 0.1 higher at 1.2032 after a 0.7 slump on Friday. Due today is Sentixs euro zone investor sentiment index for February due at 0930 GMT.

In a note to clients, J.P. Morgan strategists said they have growing confidence of underperformance of EUR vs USD.

That warrants two changes to the portfolio 1 rotating away from USD to fund trades primarily out of EUR, and 2…

Sterling Slips Slightly Versus Dollar

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