The U.S. dollar trudged on to record its first weekly advance in a month as indicators showed that U.S. economy is strengthening, boosting bets that the Federal Reserve may hike interest rates sooner than expected.
The Bloomberg Dollar Spot Index, a measure that monitors the U.S. currency versus 10 major counterparts, appeared to record a 0.2 percent increase this week. This follows data on Thursday that indicated that U.S. nonfarm payrolls surged more than analysts had expected, while jobless rate plunged to the lowest level in nearly six years. The index remained slightly unchanged at 1,007.44 as of 1:23 p.m. in London.
The U.S. dollar plunged 0.1 percent to trade at 102.06 yen, down from 102.27 yen on Thursday, the most since June 18. The greenback also declined 0.2 percent to $1.589 per euro. The euro plunged 0.3 percent to trade at 138.69 yen.
“Payrolls is always the figure the market looks to for depth of recovery and that obviously is important to the Fed,” Neil Mellor, a London-based currency strategist at Bank of New York Mellon spoke to Bloomberg News. “It’s really a question of when the dollar is going to put in a sustained burst higher. The moment hasn’t yet arrived where we’ll see a sustained recovery but it’s one step closer.”
The U.S. Labor Department reported on Thursday that private employers absorbed 288,000 more workers in June, beating analysts’ estimate of 215,000 workers in a Bloomberg survey. Unemployment rate plunged to 6.1 percent from May’s reading of 6.3 percent. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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