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Dollar Weaker, Pound Shrugs off Brexit Uncertainty

Dollar weaker, pound shrugs off Brexit uncertainty

Investing.com - The dollar was trading at three week lows against a currency basket on Monday after the latest U.S. jobs report pointed to sluggish wage growth, while the pound shrugged off the shock resignation of UK Brexit secretary David Davis.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.29% to 93.50 by 04:21 AM ET (08:21 AM GMT), the lowest level since June 14.

The index slid 0.48% on Friday after slower than expected wage growth figures slightly dimmed expectations for a fourth rate hike by the Federal Reserve this year.

While wage growth remained moderate the Department of Labor said nonfarm payrolls increased by a larger-than-forecast 213,000 in June.

Solid employment growth helped offset concerns over the escalation of the U.S.-China trade dispute after new trade tariffs came into effect on Friday.

The dollar edged lower against the yen, with USD/JPY last at 110.40.

The euro pushed higher, with EUR/USD advancing 0.25% to 1.1774, the most since June 14.

The single currency was boosted after data showing that German exports rose by more than imports in May, indicating that the euro area’s largest economy remains solid despite global trade tensions.

Sterling was also higher against the dollar, with GBP/USD climbing 0.53% to 1.3356, having recovered from an overnight low of 1.3284.

The pound initially fell following reports that British Brexit Secretary David Davis had resigned, potentially dealing a blow to Prime Minister Theresa May.

But sterling quickly rebounded amid indications that May would not face a major backlash against her Brexit policy and hopes that a softer Brexit may be on the cards moving forward.

The pound was also higher against the euro, with EUR/GBP down 0.26% to 0.8815.

The trade sensitive Australian dollar strengthened, with AUD/USD up 0.59% to 0.7472, its highest level since mid-June.

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