Dollar posts third straight weekly rise after upbeat US payrolls report

Published Mon, Apr 5, 2021 · 05:50 AM

New York

THE dollar rose on Friday in thin trading, posting its third straight weekly gain, after data showed the world's largest economy created more jobs than expected in March, suggesting that it is on a steady path to recovery from the Covid-19 pandemic.

Financial markets were closed in Australia, Singapore, Hong Kong, Britain, and Europe in observance of the Good Friday holiday. Wall Street was also closed, while the US bond and currency markets were open.

Friday's data showed US nonfarm payrolls surged 916,000 jobs last month, the largest gain since last August. Data for February was revised higher to show 468,000 jobs created instead of the previously reported 379,000. Economists polled by Reuters had forecast payrolls increasing by 647,000 jobs in March.

"The overall strength of the labour market is likely to prove dollar-positive," said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.

"The hiring explosion showed the economy producing some of the 'substantial further progress' the Federal Reserves wants to see before it pivots away from its low rate policies." He added, though, that Treasury yields may take exception given tepid wage growth which is consistent with inflation remaining subdued.

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Sentiment for the dollar has improved in recent weeks, while Treasury yields have spiked, as the Biden administration's planned stimulus of more than US$2 trillion and a rapid Covid-19 vaccine rollout spurred economic optimism as well as inflation fears.

US benchmark 10-year Treasury yields were last at 1.717 per cent, up nearly 4 basis points from the previous session.

In midday trading, the dollar index was up 0.1 per cent at 93.025, posting gains in five of the last six weeks.

The dollar's ascent to multi-month highs is likely to continue as more investors bet on economic recovery.

The dollar was up 0.1 per cent versus the yen at 110.67 yen, not far from its strongest level in a year at just under 111 yen.

The euro, meanwhile, was down 0.2 per cent against the dollar at US$1.1756. REUTERS

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