RTTNews - The dollar continued to recover versus other major currencies on Monday, as risk aversion led traders to the safety of the world's reserve currency. The steam has come out of the summer rally in equities, helping the dollar move away from its 2009 lows.
Last week, the dollar bottomed after a brutal month. Since Thursday, the buck has soared, particularly against the sterling and euro.
The Bank of England surprised the markets last week by announcing an expansion of its asset purchase program. That, among other factors, cause traders to speculate that the sterling and euro were overbought, and that the economic situation across the Atlantic remains precarious.
On Monday, the dollar jumped to a 10-day high of 1.4132 against the euro, moving away from last week's 2009 low of 1.4446.
Versus the sterling, the dollar extended its gains from Friday, rising to 1.6446. With the advance, the dollar moved more than 6 cents from a 10-month low hit last week.
The dollar may level off in the coming days, pausing for reaction to the Federal Reserve's interest rate decision on Thursday.
Against the slumping yen, the dollar rose to a month and a half high of 97.77 before fizzling out around mid-day. While both the dollar and yen suffered big losses against other majors this summer, the dollar has become the more attractive option in light of recent encouraging jobs data.
Data on Friday showed U.S. employers cut 247,000 jobs in July, far fewer than the 467,000 positions lost in June, and the unemployment rate inched down to 9.4 percent.
The dollar hit a 2-week high versus the loonie on Monday, further improving from last week's 10-month low of C$1.0630.
The U.S. Labor Department is scheduled to release its preliminary report on second quarter non-farm productivity and unit labor costs at 8:30 AM on Tuesday. The consensus estimates call for a 5.4% increase in non-farm productivity, but a 2.4% decline in unit labor costs.
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