The U.S. dollar hit a fresh three-month high versus other major currencies on Friday, as traders wagered strong U.S. labour data could lift it even further.
Strong dollar strides towards U.S. jobs test
The dollar index is on track for a further weekly gain - its fourth in five weeks - of nearly 1%. It gained 0.1% on the day, hitting 92.699.
The greenback has strengthened broadly since the U.S. Federal Reserve surprised markets last month by signalling it could tighten policy earlier than expected to curb inflation.
The U.S. jobs report is due at 1230 GMT and is forecast to show a solid rise of 700,000, with traders braced for any surprises.
The dollar hit a fresh three-month high versus the euro ahead of the report, edging up 0.2% on the day to $1.18235. It was broadly flat versus the yen and British pound.
“Many people are now arguing (over) whether the dollar has indeed bottomed, because at some point in 2023 the Fed is suggesting that it could be raising interest rates,” Paul Mackel, global head of FX research at HSBC said in an outlook call.
“Also there’s some nervousness whether the dollar’s going to start to behave in a more pro-cyclical manner, that is, if the data is stronger than expected in the U.S. that the dollar really gets more strength from that.”
Reference: Reuters
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