Dollar down in Asian trade

AFP FILE PHOTO

SINGAPORE – The dollar weakened in Asian trade Monday following a mixed US jobs report last week while traders await the congressional testimony of the head of the Federal Reserve later in the week.

The dollar was at 101.91 Japanese yen in Singapore mid-morning trade, compared with 102.19 yen in New York late Friday. The euro bought $1.3872 against $1.3869.

Financial markets in Japan, South Korea and Thailand are closed on Monday for public holidays.

Singapore’s DBS Bank said “markets were unimpressed” by data on Friday showing the US economy added 288,000 jobs in April, the most in more than two years.

The unemployment rate fell to 6.3 percent from 6.7 percent in March, the lowest level since September 2008.

But the cause was a sharp fall in the size of the active labour force rather than new hirings.

“Markets realized that both labor force and employed had shrunk, amidst a lower labor participation rate and flat wage growth,” DBS said in a note.

It said investors will be scrutinizing Fed chief Janet Yellen’s testimony to the Congress Joint Economic Committee on Wednesday to see if she provides any clues about the state of the US economy and the bank’s plans for it stimulus program.

“Yellen will probably reiterate her view that the economy, including the labor market, was recovering but not as strongly as desired,” DBS said.

“Overall, there is nothing to suggest that the Fed would roll back its measured process to taper asset purchases, or encourage markets to bring forward rate hike expectations.”

Singapore-based Phillip Futures said investors are also tracking the escalating tensions in Ukraine.

Thousands of pro-Russian protestors on Sunday attacked the police headquarters of the country’s southern port city of Odessa, following deadly clashes there and accusations by Kiev that Moscow was bent on executing a plan “to destroy Ukraine”.