U.S. Dollar Posts Third Weekly Gain against Euro on Interest Rate Bets

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U.S. Dollar Posts Third Weekly Gain against Euro on Interest Rate BetsThe US dollar advanced for the third week against the euro as investors expressed optimism that the Federal Reserve may increase interest rates soon due to improving economic conditions.

The dollar remained slightly unchanged at $1.3383 per euro as of 8:30 a.m. London time, a gain of 0.4 percent since Monday. The greenback looked set to record its first three-week advance since the week through May 23. The dollar rallied 0.2 percent to trade at 102.96 yen, bringing this week’s advance to 1.1 percent, while the euro rose 0.1 percent to 137.81 yen.

“We’ve had data confirming that the U.S. economy is a bit stronger than what everyone previously thought, and the Fed is slowly, slowly moving toward normalizing policy,” Janu Chan, a Sydney-based economist at St. George Bank Ltd told Bloomberg. “The trend is for the dollar to move higher.”

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The dollar fell later in the day after U.S. employers hired fewer workers than expected in July. Nonfarm payrolls rose 209,000, compared with 298,000 in June, reported the Labor Department on Friday. Economists surveyed by Bloomberg had expected a reading of 230,000, while those in a Reuters poll had expected 233,000.

Meanwhile, the Australian dollar recorded its steepest decline in a week since May after the final China’s manufacturing Purchasing Managers’ Index stood at 51.7 last month, compared with the initial reading of 52. The Aussie briefly spiked after a government index on Chinese manufacturing activity indicated that the sector grew the most in two years.

The Australia’s dollar remained slightly unchanged at 92.79 U.S. cents after earlier surging by up to 0.2 percent. The currency has fallen 1.2 percent since last Friday. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com