Dollar firm on expectations of higher rates
The dollar held firm against other currencies on Friday, after an upbeat U.S. jobs report added to the chances the Federal Reserve will increase interest rates, even as global peers stick to easy money policies.
The greenback was at 120.52 yen in Tokyo trade, little changed from 120.59 yen in New York late Thursday but well up from 120.28 yen in Tokyo earlier Thursday.
The U.S. Labor Department reported Thursday that the number of first-time unemployment claims filed in the past four weeks had fallen to a nearly 15-year low, suggesting a stronger labor market.
The robust data stoked speculation about the Federal Reserve’s plan to raise interest rates for the first time in nine years.
“We’re moving back to a ratedifferential story,” Mike Moran, head of macro research for the Americas at Standard Chartered, told Bloomberg News.
“The dollar correction of the last couple of weeks is starting to run its course.”
The euro bought US$1.0678 and 128.70 yen on Friday, slightly up from US$1.0659 and 128.55 yen in U.S. trade, after Greece honoured a loan payment due Thursday.
Greece made a scheduled 459-million-euro repayment to the IMF but failed to dispel market concerns over its solvency as it labors to reach a deal with creditors to reform its bailout.
Athens has until the end of April to come to an agreement with its lenders.
Later this month, it has to make interest payments of nearly 400 million euros, and roll over 2.4 billion euros in six- and three-month sovereign bills due to mature on April 14 and 17. Failure to do so would see it default and likely end up crashing out of the eurozone.
The dollar was mixed against other Asia-Pacific currencies.
It rose to SG$ 1.3593 from SG$1.3561 on Thursday, to 62.41 Indian rupees from 62.24 rupees, to 1,093.40 South Korean won from 1,092.15 won, and to 44.49 Philippine pesos from 44.47 pesos.
The greenback edged down to 12,913.00 Indonesian rupiah from 12,917.50 rupiah, and to 32.53 Thai baht from 32.54 baht.
The Australian dollar rose to 77.02 U.S. cents from 76.89 cents, while the Chinese yuan inched up to 19.41 yen from 19.39 yen.