By Stefano Ribaudo
(Reuters) – The dollar was little changed on Friday even as risk appetite recovered ahead of the US government’s release of job creation data for May.
* European stocks rose mostly as investors expected the US report to provide clues about the pace of Fed monetary tightening in the second half of 2022.
* On Thursday, the ADP’s national employment report showed that private sector jobs in the US rose at a slower than expected pace last month.
* Business on Friday was limited as financial markets in China, Hong Kong and the United Kingdom are closed for holidays.
* The dollar index settled at 101.81 against a basket of its counterparts, giving the euro stability at 1.0743 dollars.
* Investors have mixed opinions regarding the expectations of the dollar, which is still near its highest level in nearly 10 years.
– George Saravelos, global head of foreign exchange at Deutsche Bank, said the dollar is “priced at such a safe haven risk premium that it rarely sustains over time and is now in the process of reversing.”
* The most optimistic analysts argue that the Fed’s tightening cycle is based on a stronger growth record from Europe, especially after the Russian oil embargo measures that could hurt the eurozone economy.
* Among other currencies, the offshore yuan rose 0.4% against the dollar on thin trading volumes, reaching a one-month high of 6.6321, following recent positive signs for the domestic economy affected by coronavirus restrictions.
* The yuan hit its lowest level since September 2020 at 6.83 per dollar in mid-May.
* Data from the PMI survey showed factory activity in China contracted at a slower pace in May, and Beijing authorities took measures to support the city’s economy.
(Reporting by Stefano Ribaudo. Editing in Spanish by Marion Giraldo)