NEW YORK: The dollar plunged below a four-year peak on Monday, prompting some investors to take profits on extremely long positions.
The dollar index eased 0.2 percent to 87.513, following a 0.4 percent fall on Friday as it retreated from 88.190 – a high not seen since June 2010.
US employers added 214,000 new jobs to their payrolls last month, missing forecasts for 231,000. Details of the report were solid with the unemployment rate dipping to a fresh six-year low of 5.8 percent even as more people entered the work force
Yet, the data prompted big falls in U.S. Treasury yields, with the two-year sliding to 0.503 percent US2YT=RR from a one-month high of 0.567 percent.
That in turn undermined the dollar, which slid to 114.45 yen JPY= from a seven-year high of 115.60. The euro bounced to$1.2463 EUR= from a two-year trough of $1.2358.
The data offered fresh evidence the U.S. economy was outperforming Europe and Japan and highlighted the diverging policy outlooks between the Federal Reserve and the European Central Bank and Bank of Japan.
That has supported a four-month long rally in the dollar, although Friday’s reaction suggested investors were starting to turn a bit cautious and looking for more reasons to put on fresh bullish trades.
