By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — The U.S. dollar traded little changed Monday, holding on to gains made after a stronger-than-expected jobs report, with the Federal Reserve’s policy outlook squarely in focus for the week ahead.
In the early afternoon in East Asia, the ICE dollar index DXY -0.03% , a measure of the U.S. unit against six rivals, sat at 81.242, fractionally lower from 81.255 late Friday. Likewise, the WSJ Dollar Index XX:BUXX -0.04% inched down to 73.42 from 73.43.
The dollar made solid gains Friday after data showing the U.S. economy added 204,000 jobs in October, beating expectations for a more modest 100,000 increase. The result raised questions over how long the Federal Reserve will delay its plans to slow — or “taper” — the rate of its monetary stimulus.
RBC Capital Markets senior currency strategist Sue Trinh said that while Monday trade was thin due to holidays in the U.S. and Canada, the week ahead features scheduled public appearances from Fed officials which could move the forex market.
RBC was forecasting the Fed to begin tapering at its March meeting, and Trinh wrote that although “the latest Reuters poll of primary dealers shows the market is somewhat split between March and January ... we think January is tricky since it is the transition month from [current Fed Chairman Ben] Bernanke to [designated successor Janet] Yellen, and they run the risk of blurring the messaging if Bernanke decides to taper before Yellen takes the reins.”
Clues to the Fed’s plans for tapering may surface Thursday, when Yellen is due to testify before the Senate Banking Committee as part of her confirmation process. Bernanke was also due to give a question-and-answer session on Wednesday.
ICICI Bank also highlighted speeches early in the week from three other Fed policy-board members: Minneapolis Fed Pres. Narayana Kocherlakota, Atlanta Fed Pres. Dennis Lockhart and Dallas Fed Pres. Richard Fisher.
The ICICI analysts put the ICE dollar index’s Monday support level at 80.90, with resistance at 81.50.
In other forex trade Monday, the euro EURUSD +0.11% was little changed, buying $1.3359, compared to late Friday’s $1.3361.
The bank is forecasting that the euro will trade at $1.32 at the end of next month.
Other major currency pairs saw similarly little movement Monday, with the Australian dollar AUDUSD -0.02% at 93.86 U.S. cents from Friday’s 93.88 U.S. cents, and the British pound GBPUSD +0.06% firming slightly to $1.6012 from $1.5995.
Against the Japanese yen USDJPY -0.26% , the dollar sat at ÂĄ99.01, virtually flat from ÂĄ99.00 at the end of the previous week.
