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2 Minute Read* FX rates around the world are depicted graphically. Reuters/tmsnrt.rs/2RBWI5ELONDON, 2 JULY On Friday, the US dollar rose to a new three-month high against other major currencies, as speculators bet that good US labor statistics would push it further higher. The dollar index is on course for another weekly increase of about 1%, its fourth in five weeks. It increased by 0.1 percent on the day to 92.699. The dollar has risen sharply since the Federal Reserve of the United States startled investors last month by signaling that it may tighten policy sooner than expected to combat inflation. The US jobs data is scheduled at 1230 GMT, and it is expected to show a robust increase of 700,000 jobs, with traders expecting any surprises. In a commentary, currency analysts at MUFG stated, “The FX markets have undoubtedly become more sensitive to incoming US economic data.” “This signals to us that FX positioning may still be short US dollars, resulting in the dollar’s ongoing strengthening.” Analysts believe that a higher number in the employment report could increase fears of tighter Fed policy. In a letter to clients, DBS Bank strategist Philip Wee wrote, “The dollar has started July well; a U.S. non-farm payrolls meet or exceed today would maintain that momentum.” Ahead of the data, the dollar climbed to a new three-month high against the euro, rising 0.2 percent to $1.18235 on the day. It was essentially unchanged against the yen and the British pound. In an outlook call, Paul Mackel, global head of FX research at HSBC, stated, “Many people are now disputing (about) whether the dollar has actually bottomed, because the Fed is signaling that it could be hiking interest rates at some point in 2023.” “There’s also some concern about whether the dollar will begin to act in a more pro-cyclical fashion, meaning that if data in the United States is stronger than expected, the dollar would benefit.” Iain Withers contributed reporting, and Tom Westbrook contributed further reporting from Singapore; Emelia Sithole-Matarise edited the piece./nRead More

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