by 4 minutes Read more: * The dollar index soars to its highest level since April 6* The Australian dollar falls to December lows* The Swedish crown is on the back foot following the Riksbank decision* FX rates around the world are depicted graphically. Reuters, tmsnrt.rs/2RBWI5ELONDON, 1 JULY The dollar index rose to three-month highs on Thursday, ahead of a jobs data from the United States that could indicate when the Federal Reserve will begin to reduce stimulus. For the first time since March 25, 2020, the dollar surged to 111.50 yen, up 0.3 percent on the day. The dollar index, which compares the greenback to six other currencies, climbed to 92.547 in early European trade, its highest level since April 6. In June, the index had its best month since November 2016, thanks to the Federal Open Market Committee’s (FOMC) surprising hawkish move in the middle of the month, when policymakers signaled two rate rises by the end of 2023. “The failure of dollar sellers to resurface in recent weeks has eroded the confidence of long-term dollar bears,” said Jane Foley, head of FX strategy at Rabobank. “The June 16 FOMC sparked a debate about whether the Fed could raise rates as soon as 2022, and we expect this risk to keep the dollar well bid as long as US data remains broadly positive.” Traders are hoping for confirmation of that outlook in Friday’s U.S. nonfarm payrolls report, with economists surveyed by Reuters anticipating a gain of 700,000 jobs last month, up from 559,000 in May, and an unemployment rate of 5.7 percent, down from 5.8 percent the previous month. The dollar gained more ground on Wednesday after data indicated that private payrolls in the United States expanded by 692,000 jobs in June, more than predicted. “Stronger-than-expected U.S. ADP statistics, upbeat remarks from Atlanta Fed President Bostic, and lack of risk appetite in most equities markets boosted the greenback yesterday,” said Roberto Cobo Garcia, FX strategist at BBVA. “Despite good PMI figures in the EMU and a risk-on mentality in commodities and equity markets, the move has been extended today.” After euro zone purchasing manager’s indices (PMIs) came in stronger than expected, the euro fell to $1.1851 after sliding as low as $1.1837 on Thursday for the first time since April 6, before recovering to trade flat. Sweden’s crown fell 0.3 percent against the dollar to 8.57 crowns per dollar and 0.2 percent against the euro to 10.16 crowns per euro elsewhere in Europe. On Thursday, the Swedish central bank kept its monetary policy steady. Following the departure of Social Democrat Prime Minister Stefan Lofven following a no-confidence vote last week, the country’s MPs are still trying to create a new administration. The Australian dollar, which is viewed as a barometer of risk appetite, fell 0.2 percent to $0.7476, its lowest level since December 21, with Sydney, Brisbane, Perth, and Darwin all on lockdown. The Reserve Bank of Australia will meet on Tuesday to make policy choices, and officials have already hinted that it will reveal decisions on its three-year yield target as well as its larger quantitative easing program, which will finish in September. In a departure from usual practice, RBA Governor Philip Lowe will address a press conference thereafter. Sterling fell 0.5 percent to $1.3765 against the dollar, a new two-month low. Ritvik Carvalho contributed reporting, with Kevin Buckland in Tokyo contributing additional reporting; Barbara Lewis, Simon Cameron-Moore, and Chizu Nomiyama edited the piece./n
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