The dollar edged downward on Monday after touching a 6.5-month high following last week's stronger-than-expected monthly U.S. jobs report. "It's more of a positioning-driven move than anything fundamental," said Ian Gordon, FX strategist at Bank of America Merrill Lynch, of the dollar's Monday losses. "You had a pretty strong increase in positioning, dollar-long-positioning, over the past couple of weeks and then that kind of followed through after the (jobs) report. And now that has kind of stalled and people are taking profit." As of Nov. 3, the latest date for which data is available, speculators in futures markets had a short position of about 134,000 contracts in the euro, the biggest since June, according to Commodity Futures Trading Commission figures. Short positions in the yen also grew.
Sterling steadied just above $1.51 on Monday and gained around a third of a percent against the euro, a late rise around London's 4 PM fixing session helping it retrieve a portion of the last two days' 2.5 percent loss. The pound continues to look to many strategists like one of the currencies most exposed to an expected further global rally for the dollar after another perceived about-face by the Bank of England on interest rates last week. Shockingly, strong U.S. jobs data on Friday bolstered expectations of a rise in U.S. interest rates next month and a resulting surge for the dollar towards parity with the euro. But dealers said markets had been firmly in consolidation mode on Monday.
The price of gold edged modestly up on Monday, snapping an eight-day losing streak as the dollar retreated, but still hovered near its lowest in three months after robust U.S. jobs data boosted expectations of a U.S. rate hike in December. Spot gold XAU= was up 0.2 percent at $1,090.20 an ounce at 2:32 PM EST (1932 GMT), while U.S. gold futures GCZ5 for December delivery settled up 40 cents at $1,188.10 an ounce.