The dollar rises before the wage bill and resumes its rise against the yen

U.S. dollar and Japanese yen notes are seen in this June 2, 2017 file photo. REUTERS/Thomas White/Illustration

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TOKYO, April 1 (Reuters) – The dollar extended its rebound against its major peers on Friday, also resuming its rally against the yen, ahead of a key U.S. jobs report that could cement the potential for a 50 basis point hike in Federal Reserve interest rates. next month.

The US currency also garnered support due to its status as a preeminent safe haven as peace talks between Russia and Ukraine stumbled, although they are expected to resume later on Friday. Read more

The dollar index, which measures the greenback against six peers including the euro and the yen, rose 0.10% to 98.420, building on Thursday’s 0.50% rise.

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Mid-week it fell to a four-week low of 97.681 amid a month-long consolidation that followed a breathless climb to an over-nine-month high of 99.415.

The Federal Open Market Committee (FOMC) will then decide policy on May 5, with CME Group’s FedWatch tool showing a 71% chance of a half-point rate hike.

Economists predict Friday’s Labor Department report will show nearly half a million U.S. jobs were created last month, with the jobless rate falling as wage growth accelerated.

The dollar index “has been disappointing lately, but has shown some backbone overnight (and) upside potential remains within reach amid continued waves of fiercely hawkish Fedspeak and an aggressive profile frontloading which includes nearly 100 basis points of increases over the next two FOMC meetings,” the Westpac strategists wrote. in a customer note.

They predicted a break above 100 for the dollar index “in the coming weeks”.

The second of two FOMC meetings will be held on June 14-15.

The dollar rose 0.41% to 122.18 yen, its first gain in four days as the currency pair trailed moves in long-term US Treasury yields. It was little changed this week, after rising 6.5% over three weeks.

“The case for a much higher USD/JPY rally is still compelling, as Fed rate hikes will revolutionize hedging arithmetic for JPY-based investors and sensitivity to hedging costs. rises,” RBC Capital Markets strategists wrote in a note.

“A small portion of this flow is likely to have occurred so far and the March rally was largely fueled by investors outside of Japan anticipating JPY selling domestically,” they wrote. . “If positioning improves, we will revert to buying USD/JPY dips.”

The euro walked on water at $1.10690, following its sharp decline the previous session from a one-month high of $1.11850 as Ukrainian optimism faded. Even so, it is on track for a weekly advance of 0.82%.

The pound slid 0.07% to $1.31360, taking its loss for the week to 0.36%.

The risk-sensitive, commodity-linked Australian dollar was flat at $0.74825, down 0.45% this week after starting the period by hitting a nearly five-month high at $0.7540.

The cryptocurrency bitcoin fell 0.93% to $45,093.74, slipping 3.78% this week after hitting $48,234.00 on Monday for the first time since the start of this year.

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Reporting by Kevin Buckland; edited by Bradley Perrett

Our standards: The Thomson Reuters Trust Principles.

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