The U.S dollar on Friday, March 10, surged to seven-week highs against the yen, as investors awaited U.S. jobs data that is likely to cement expectations of a Federal Reserve interest rate hike next week.
The dollar climbed almost half a percent on Friday to 115.495 yen, its highest levels since Jan. 20, leaving it up nearly 1-1/2 percent for the week.
The dollar index, which tracks the greenback against a basket of six major rivals, was flat at 101.80. It was on track for its fifth straight week of gains – its best run in eight months – after a quarter-of-a-percent rise this week.
A surprisingly robust private U.S. jobs report from ADP on Thursday bolstered bets the monthly non-farm payrolls release due at 1330 GMT will come in strong, further strengthening the case for the Fed to raise rates at meeting next week – as signalled in recent weeks by Fed officials.
Markets are now pricing in an almost 90 percent chance of a hike, according to Reuters data.
“In the near term it’s going to be quite tough for there to be further dollar strength, given how well-priced the Fed meeting is next week, and also just how much the market has priced for the year now as a whole,” said CURRENCY strategist Hamish Pepper at Barclays in London.
“Of course that (pricing) holds some relevance for the labour market report today – it implies that you really need to see quite a significant upside surprise if you’re to see continued dollar strength.”
Economists polled by Reuters forecast that U.S. employers likely added 190,000 workers last month.
The euro was up 0.3 percent at a four-day high of $1.0618, having been boosted by comments from European Central Bank head Mario Draghi on Thursday that investors saw as somewhat hawkish.
