ILUSTRASI. FILE PHOTO: A U.S. dollar note is seen in front of a stock graph in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration/File Photo
KONTAN.CO.ID - TOKYO (Reuters). The dollar held steady against the euro on Wednesday ahead of data expected to show U.S. manufacturing activity and hiring continued to recover from the economic shock caused by the coronavirus pandemic.
The euro was hemmed into a narrow range as traders awaited data on Germany’s manufacturing sector, retail sales, and the jobless rate to gauge the health of the eurozone economy.
The yen firmed slightly on safe-haven flows after a top government spokesman said Japan could re-impose a state of emergency in response to the coronavirus.
A surge in new infections in the U.S. south and southwest has worried some market participants, but most investors are betting this will not be enough to derail a broader rebound in the global economy.
“The dollar will be supported against the yen if U.S. economic data are positive, but U.S. yields are not rising much because of speculation about yield curve control,” said Shusuke Yamada, head of foreign exchange and Japan equity strategy at Merrill Lynch Japan Securities.
“The euro looks stable, but there are questions about Brexit and the pace of economic reopening, which means the euro could soon be overvalued.”
The euro EUR=D3 held steady at $1.1223. Against the British pound, the common currency EURGBP= traded at 90.77 pence following a 0.9% decline on Tuesday.
The yen edged up to 107.63 per dollar JPY=, pulling back from a three-week low.
The yen barely reacted after Bank of Japan data showed business sentiment fell to an 11-year year low.
Sterling GBP=D3 bought $1.2367, surrendering some of the previous day's gains due to worries about Britain's trade negotiations with the European Union.