Dollar gains on Fed speculation
Dollar extends gains on Monday as a US jobs report fuels speculation that the Federal Reserve may hike interest rates as early as next month.
|||Tokyo - The dollar extended its gains on Monday as a closely watched US jobs report fanned speculation that the Federal Reserve may hike interest rates as early as next month.
Financial market turmoil and worries about global growth have been weighing on expectations for more rate hikes this year.
But Friday's upbeat employment report has reignited speculation the US central bank will raise borrowing costs again - a plus for the greenback.
The January jobs report showed hiring eased but the unemployment rate slipped to 4.9 percent - its lowest in eight years - while wage growth increased modestly.
“Stronger than expected US wage growth has called into question last week's accepted wisdom that the US dollar would fall as moderating economic growth pressured the Fed to delay its rate hike programme,” Ric Spooner, a chief analyst at CMC Markets in Sydney, wrote in a report.
In midday trading, the dollar rose to 117.16 yen from 116.86 yen on Friday in New York, while the greenback also broadly rose against emerging currencies including the Taiwan dollar, Philippine peso, South Korean won and Indonesian rupiah.
The euro slipped to $1.1138 from $1.1158, while it ticked up to 130.49 yen against 130.40 yen in US trading.
Investors are now awaiting Fed chief Janet Yellen's testimony to Congress this week for clues about the central bank's plans.
“Markets are looking to Yellen's testimony this week to see whether she will still leave an option open for a March rate increase or sound dovish,” Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank, told Bloomberg News.
AFP