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2 Minutes Read (Reuters) – LONDON (Reuters) – 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. PHOTO FROM THE FILE: In this illustration photo taken on June 1, 2017, a five dollar bill from the United States is seen. REUTERS/Thomas White/File Photo/Illustration The dollar index is expected to advance over 1% this week, marking the fourth weekly gain in the last five weeks. It climbed to a high of 92.699 before losing some steam and closing the day at 92.582. 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 note, 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 a quarter of a percent to $1.18205. It was essentially unchanged against the yen and the British pound. “Many individuals are now debating whether the dollar has actually bottomed, given the Fed has hinted that interest rates could be raised at some time in 2023,” says one source. In an outlook call, HSBC’s global head of FX research, Paul Mackel, stated. “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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