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22 May 2024

Dollar rally weakens amid profit-taking

By Agencies

The dollar fell broadly, with its recent run to one-month high against the euro and yen losing steam as jitters began to surface on the state of the US employment market.

The speed of the dollar's rise also made it vulnerable to profit-taking, with dealers citing central bank buying of euros at lower levels for reserve-management purposes and interest from funds.

But the euro area and, by extension, the single currency's vulnerability were never far from investors' radars as data from Germany showed a larger-than-expected rise in unemployment.

"The dollar rally is showing signs of fatigue. Maybe there is a bit of nervousness ahead of the US non-farm payrolls on Friday," said Audrey Childe-Freeman, senior currency strategist at Brown-Brothers Harriman in London.

During intraday trading, euro was up 0.7 per cent at $1.3605, having dipped to a one-month low of $1.3308 on Tuesday.

The dollar fell 0.4 per cent against a basket of six major currencies to 82.585, while it also retreated 0.6 per cent to 93.04 yen after hitting one-month highs.

Other Asian currencies also advanced, led by the Indonesian rupiah and the South Korean won, on speculation rate cuts in the region and US stimulus spending will help revive economic growth. The rupiah climbed 2.9 per cent to 10725 per dollar and the won climbed 1.6 per cent to 1292.50.