Dollar Hovers Below Two-Month High Ahead of USJobs Report

The dollar rose on Tuesday, June 29, approaching a two-month high against major currencies, with many traders largely reluctant to bet before an important US jobs report could change the timing of the Federal Reserve’s halt to stimulus programs.

The dollar index, which tracks the dollar’s movement against six major currencies, rose 0.1% to 91.966 in Asia, slowly approaching its peak of 92.408 hit on June 18, after the US Federal Reserve shocked markets with the expectation of two interest rate hikes by the end of 2023.

Since then, the Fed’s report has put the focus on data to determine the appropriate timing to reduce asset purchases and raise interest rates, and Fed Chairman Jerome Powell said a week ago that “fear” of inflation would not be the only driver of policy makers’ action and that they would encourage a “broad and comprehensive recovery” of the labor market.

According to a poll of economists conducted by Reuters, the Ministry of Labor is expected to announce the addition of 690 thousand jobs in June, compared to 559,000 jobs in May, and an unemployment rate of 5.7% compared to 5.8% in the previous month.

The dollar fell 0.06% to 110.45 yen, staying below a 13-month high of 111.110 yen hit last week.

The dollar and the yen benefited from some safe-haven demand after the outbreak of the highly contagious delta strain Covid-19 in Asia and elsewhere, raising fears of more isolation measures.

The euro fell 0.07% to $ 1.19145, retreating again towards its lowest level in two and a half months, which it touched on June 18 at $ 1.8470.

The British pound fell to its lowest level in two months, falling 0.06% to $ 1.38695.

And the Australian dollar, which is considered a liquid indicator of risk appetite, fell 0.09% to $ 0.75580, after falling 0.31% at the beginning of the week, amid fears of renewed public isolation measures in some parts of the country.

The New Zealand dollar fell 0.19% to $0.70280, after falling 0.40% on Monday. Prior to that, the New Zealand currency rose for five days in a row from its lowest level since November.