November 1, 2019 / 2:44 PM / 20 days ago

FOREX-Dollar drops on mixed data, trade optimism

    * U.S. added more jobs than expected in October
    * U.S. manufacturing contracted in October 
    * Dollar weighed down by trade optimism, slowdown fears

 (Adds manufacturing data, Clarida comments, updates prices)
    By Karen Brettell
    NEW YORK, Nov 1 (Reuters) - The dollar dropped on Friday
after data showed a mixed view on the economy, and as optimism
that the United States and China will reach a deal to end their
trade war reduced safe-haven demand for the greenback.
    The dollar initially gained after U.S. jobs growth slowed
less than expected in October, while wages gained and hiring in
the prior two months was stronger than previously estimated.
    “The data is much better than expected. Markets were braced,
certainly in headline terms, for some much weaker numbers given
the expected impact from the GM strike and the census hiring. So
very good data in that context,” said Shaun Osborne, chief
foreign exchange strategist at Scotiabank in Toronto.
    Striking workers who do not receive a paycheck during the
payrolls survey period are treated as unemployed. The strike by
about 46,000 workers at GM plants in Michigan and Kentucky ended
last Friday.
    Temporary census workers also left their jobs during the
month.
    The U.S. currency was unable to hold onto the gains,
however, and was further dented after the Institute for Supply
Management (ISM) said its index of national factory activity
fell below economists’ expectations.
    The dollar index against a basket of six major currencies
 was last 97.22, down 0.13% on the day. It earlier rose to
97.45 on the jobs data.
    The dollar has weakened since the Federal Reserve on
Wednesday cut interest rates for the third time this year, and
indicated that further reductions may not be forthcoming.

    Concerns about a slowing American economy is weighing on the
greenback, with the U.S. central bank expected to resume rate
cuts if the economic data worsens.
    “There is a bit more vulnerability starting to feed into the
dollar with perhaps the U.S. economy slowing down,” Osborne
said.
    Fed Vice Chair Richard Clarida said on Friday that the rate
cuts put into effect leave the U.S. economy better armed to
withstand the risks of a global slowdown.
    Safe-haven flows into the U.S. currency have also weakened
on optimism that the United States and China are close to
reaching a deal to end their trade war, which has been blamed
for slowing global growth.
    The initial "phase one" trade pact with China appears to be
in good shape and is likely to be signed around mid-November,
although a finite date is still in question, U.S. Commerce
Secretary Wilbur Ross said on Friday.
    ========================================================
    Currency bid prices at 10:30AM (1430 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1160        $1.1150     +0.09%         -2.69%      +1.1168     +1.1129
 Dollar/Yen       JPY=        108.0100       108.0200    -0.01%         -2.04%      +108.2500   +107.9000
 Euro/Yen         EURJPY=     120.55         120.46      +0.07%         -4.49%      +120.6500   +120.3700
 Dollar/Swiss     CHF=        0.9867         0.9863      +0.04%         +0.55%      +0.9894     +0.9855
 Sterling/Dollar  GBP=        1.2955         1.2940      +0.12%         +1.54%      +1.2972     +1.2928
 Dollar/Canadian  CAD=        1.3166         1.3159      +0.05%         -3.46%      +1.3195     +1.3140
 Australian/Doll  AUD=        0.6917         0.6893      +0.35%         -1.87%      +0.6920     +0.6885
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1013         1.0999      +0.13%         -2.14%      +1.1018     +1.0999
 Euro/Sterling    EURGBP=     0.8613         0.8615      -0.02%         -4.13%      +0.8629     +0.8596
 NZ               NZD=        0.6453         0.6411      +0.66%         -3.93%      +0.6455     +0.6407
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.0965         9.1906      -1.02%         +5.30%      +9.1983     +9.0916
 Euro/Norway      EURNOK=     10.1548        10.2490     -0.92%         +2.50%      +10.2585    +10.1510
 Dollar/Sweden    SEK=        9.5731         9.6499      -0.74%         +6.80%      +9.6563     +9.5669
 Euro/Sweden      EURSEK=     10.6848        10.7641     -0.74%         +4.10%      +10.7710    +10.6817
 
 (Reporting by Karen Brettell; Editing by Chizu Nomiyama and
Jonathan Oatis)
  
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