On Monday, June 28, the USD climbed ahead of the U.S. Payrolls data released on Friday.
While investors still worry about the tightening of the monetary policy from the U.S. Federal Reserve if inflationary pressures will proceed to intensify.
The U.S. Dollar Index, which trails the greenback in opposition to its six rival currencies, jumped 0.03% to 91.868.
Comments from the Boston Federal Reserve President Eric Rosengren last Friday added support to the U.S. currency.
He suggests that the central bank could consider an interest rate hike as soon as late 2022. This will coincide this the labor market reaching full employment.
Meanwhile, the GBP/USD pair rose 0.04% to 1.3882. Bank of England Chief Andrew Haldane is set to speak later in the day.
On the other hand, the USD/JPY fell 0.08% to 110.069. The Bank of Japan released its summary opinions earlier in the day.
Japanese policymakers anticipated that the fast pace of coronavirus vaccination will drive the nation’s economic recovery.
Conversely, USD/CNY spiked 0.13% to 6.4631 as China is about to release its Manufacturing and Nonmanufacturing Purchasing Managers’ indexes on Wednesday.
Consequently, the AUD/USD and NZD/USD both traded higher by 0.13% to 0.7585 and 0.03% to 0.7070, respectively.
Some analysts ascribed Asian trading’s lack of momentum to a spike in COVID-19 cases in the region.
It is as Australia’s most crowded city of Sydney went into lockdown as well as Thailand which announced new curbs in Bangkok and its other provinces.
In addition, Indonesia is currently in a battle against record-high coronavirus cases. Meanwhile, Malaysia’s pandemic curb is set to be extended.
Moreover, the U.S. dollar’s initial hit last Friday is due to the release of the Fed’s favorite inflation gauge which is the core U.S. personal consumption expenditures price index.
This soared 0.5% in May which is short of expectations for a 0.6% progress which reassured some investors that the inflation is not running out of control.
Nonetheless, the year-on-year was 3.4% which is the highest jump since 1992 and failed to completely crush fears that the Fed might be forced to normalize monetary policy sooner.
Meanwhile, the market’s focus this week is the U.S. payroll data that will be released later on Friday as economists expect an increase of 675,000 jobs.
Investors also want to look at the other parts of the labor market reports such as wage growth and labor force participation.
It is due to the concerns over mismatches of skills and opportunities in the labor market.