The dollar fell broadly on Tuesday as investors sought clearer signals on the U.S. economy and interest rates ahead of U.S. jobs data and speeches by Federal Reserve officials later this week.
The U.S. currency slipped 0.2% to 119.74 yen in late-afternoon trade, on pace for its lowest close in three weeks. The dollar inched 0.1% lower versus the euro, as the common currency bought $1.1251. The Wall Street Journal Dollar Index, which measures the greenback against a group of 16 widely traded currencies, decreased 0.1% to 88.69.
Lingering worries about global growth, stemming from a perceived slowdown in the China’s economy, lower commodity prices and emerging-market weakness, continued to check investors who anticipate further dollar appreciation. Many money managers have doubts over whether fragile overseas economies will slow U.S. growth and further delay the Fed from raising its benchmark interest rate for the first time since 2006.
Investors pushed the dollar to multiyear highs against other major currencies between July 2014 and March 2015, with expectations that the U.S. economy would soar and that the central bank would lift borrowing costs around midyear. But the dollar’s rally stalled as uneven U.S. data and growing uncertainty over the health of economies around the world raised doubts about the Fed’s intentions.
Now investors await stronger indications from U.S. data, notably from nonfarm payrolls numbers for September, which will be released Friday. Economists predict the report will show the U.S. economy created 200,000 new jobs this month, compared with 173,000 in August.
“If we see a 200K jobs report, the markets will look at a December [meeting], and even an October meeting, for Fed liftoff,” said Mark McCormick, currency strategist at Crédit Agricole.
In addition, asset managers are seeking new indications that the Fed intends to raise interest rates this year, something Fed Chairwoman Janet Yellen and New York Fed President William Dudley have suggested over the past few days.
Ms. Yellen will speak again on Wednesday at the St. Louis Fed community banking research and policy conference. On Friday, Stanley Fischer, the central bank’s vice chairman, is scheduled to speak about monetary policy at the Boston Fed.