By CHIARA ALBANESE The dollar gained further against some emerging-markets currencies Monday, extending the rally seen after upbeat U.S. jobs data Friday cemented the notion that U.S. monetary easing is set to come to an end, but it pulled back slightly against the euro, sterling, and Australian dollar. The catalyst for broad dollar strength was a better than expected non-farm payroll release on Friday. The U.S. economy added 195,000 jobs in June compared with a consensus of 165,000, which reinforced investors' expectations that the U.S. Federal Reserve is moving closer to winding down its bond-buying program. "The payroll report was very positive, but the strength of the dollar goes beyond that. The U.S. is set to become an investment destination and the dollar will benefit from longer term flows," said Ian Stannard, head of European foreign exchange strategy at Morgan Stanley MS +2.16% . The bank expects the dollar to be trading around $1.26 against the euro in the short to medium term, moving further to a $1.19 level at the beginning of 2014. The euro now trades at over $1.28. The buck is also set to gain further against the Japanese yen, trading at around ¥120 against the yen in the longer term, Morgan Stanley forecast. The yen was trading at ¥101.07 on Monday morning in Europe. For now, dollar strength is most pronounced against emerging-market currencies. The Indian rupee touched a fresh all-time low against the dollar in late Asian trading Monday with the greenback rising to as high as 61.21 rupees on the strong U.S. jobs data. The rupee has been one of Asia's worst-performing currencies so far this year and has lost about 12% of its value against the dollar since the start of May. The Reserve Bank of India has been selling dollars sporadically in the open market in recent weeks, but dealers say it hasn't mounted a strong defense. There was no sign of central bank intervention in the currency markets Monday, dealers said. The Turkish lira was trading at its weakest level of 1.9734 lira against the dollar in early Monday trading, recovering to a 1.95 lira level after Turkey's central bank said it will begin additional monetary tightening. The buck also tested recent highs against the South African rand, at around 10.30 rand. Meanwhile, the dollar edged lower against bigger currencies such as sterling, the euro and the Australian dollar, chipping away slightly at Friday's large gains. The Australian dollar hit a low of $0.9048 against the dollar in Asian trading, but picked up to just above $0.9070 during European trading hours. Similarly, the pound and euro gained around 0.4% to trade at $1.49 and $1.2860 respectively. Elsewhere, the Swedish krona hit a low of 8.7275 krona against the euro after the release of May industrial production data on Monday, which fell by 2.6% on the month and by 7.3% on the year against expectations of +0.4% and -3% respectively. At 1110 GMT, the euro was trading at $1.2853 against the dollar, compared with $1.2831 late Friday in New York, according to trading system EBS. The dollar was at ¥101.235 against the yen, compared with ¥101.05, while the euro was at ¥130.10 compared with ¥129.70. The pound was trading at $1.4909 against the dollar, compared with $1.4856late Friday in New York. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of currencies, was trading at 76.170, compared with 75.6501 late Friday in New York.

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