* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Saikat Chatterjee
LONDON, May 10 (Reuters) - The U.S. dollar nursed losses
near 2-1/2 month lows on Monday as a disappointing U.S.
employment report prompted investors to unwind their growing
long positions in the greenback.
The United States created a little more than a quarter of
the jobs that economists had forecast last month and the
unemployment rate unexpectedly ticked higher, casting doubts
that the Fed would consider advancing the time line of
tightening policy in the coming months. The dollar index =USD , which measures the greenback
against six rivals, stood at 90.305, up 0.2% on the day, after
dipping as low as 90.128 for the first time since Feb. 26
earlier in the session.
"The more erratic the recovery on the U.S. labour market,
the longer the Fed will take to consider rate steps,"
Commerzbank strategists said in a note
However, the dollar's losses were broadly cushioned thanks
to firmer U.S. Treasury yields US10YT=RR , which were up nearly
2 bps in early London trading at 1.60%
The British pound GBP=D3 was the biggest gainer among the
most-traded currencies, rallying 0.5% to $1.4067 the highest
since Feb. 25, despite Scotland's leader saying another
referendum on independence was inevitable after her party's
resounding election victory.
Such a referendum requires the backing of the UK government
in London and Prime Minister Boris Johnson has ruled out holding
another vote, saying the country faced more pressing challenges
such as the recovery from the coronavirus pandemic.
The euro EUR=EBS eased 0.1% to $1.2142, earlier touching
the highest since Feb. 26 at $1.2177.
"The unexpected slow recovery in the U.S. labour market
reinforces the FOMC's patient approach to monetary policy,"
while "the improving global economic outlook is a medium-term
weight on the USD," Commonwealth Bank of Australia strategist
Kim Mundy wrote in a client note, predicting a break above $1.22
for the euro.
That view was shared by JP Morgan strategists who cut their
net long dollar positions against a basket of G10 currencies,
notably the euro and the Antipodean currencies. Broader
positioning data also revealed a similar trend.
The Aussie dollar AUD=D3 traded close to a
more-than-two-month high at $0.7847, while Canada's loonie
CAD=D3 rallied to a fresh 3-1/2-year high of $1.2111.
In cryptocurrencies, ether ETH=BTSP> extended this month's
record run, surging more than 5% to an unprecedented $4,148.88.
The second-biggest digital token has rallied 41% so far in May.
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