RTTN:Dollar Strengthens Against European Majors Ahead Of Non-farm Payrolls Data
The US dollar edged higher against the major currencies of Europe in early European deals on Friday as the market is looking for the U.S. non-farm payrolls report, which is due later in the global day.
Economists expect jobs to grow 165,000 in the month of June following last month's 175,000 increase. The unemployment rate is expected to drop to 7.5 percent from 7.6 percent recorded in May.
The prelude for the non-farm payrolls report was quite encouraging, with the latest ADP report showing that the private sector added larger than expected jobs in June.
An employment component of ISM services posted strong gains in June also revived hopes for the upbeat labor market conditions in the U.S.
European currencies were particularly vulnerable to Thursday's central bank decisions on interest rates.
The European Central Bank retained its main refinancing rate at a record low of 0.5 percent and maintained other unconventional monetary easing measures unchanged.
Bank of England, headed by the new Governor Mark Carney, decided to leave the interest rate unchanged at a record low of 0.5 percent and the asset purchase program at GBP 375 billion.
Although the outcome was widely expected, the pound fell sharply as its policy statement noted that the higher market interest rates are weighing on its economic outlook.
"The implied rise in the expected future path of Bank Rate was not warranted by the recent developments in the domestic economy", the central bank said.
There have been further signs that a recovery is in train, although it remains weak by historical standards and a degree of slack is expected to persist for some time, the bank said in a statement.
Elsewhere, a leading indicator of Japan's business conditions grew faster than expected in May, preliminary data released by the Cabinet Office showed today.
The composite leading index rose to 110.5 in May from an upwardly revised 107.7 in April and 106.2 in March. The coincident economic index, which measures the current activity, moved up slightly to 105.9 from a revised 105.1 in April.
Swiss consumer prices declined less than expected in June, a report from the Federal Statistical Office showed today. The consumer price index fell 0.1 percent year-on-year in June compared with forecast for a 0.4 percent decline. This followed a 0.5 percent drop in May and 1.1 percent fall in June 2012. Month-on-month, CPI rose 0.1 percent against forecast of 0.2 percent decline.
The dollar rose to a fresh 5-week high of 1.2877 against the euro around 3:50 am ET. Further upside bullish momentum could help the dollar challenging the next major resistance area at 1.2850.
Against the pound, the major 1.50 level has broken for the first time since March 14, with the dollar rising as high as 1.4990 around 3:50 am ET. The next bullish barrier for the greenback is seen around the 1.4920 level.
The US currency climbed to 0.9593 against the Swiss franc around 3:45 am ET, its strongest level since June 03. The next key resistance for the greenback-franc pair is seen around the 0.9620 area.
