Dollar Climbs to 3-Week High With More Jobs Growth Projected

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The dollar climbed to a three-week high before a government jobs report that may support Federal Reserve moves toward higher interest rates.

The greenback advanced versus all of its major peers as a private survey showed American companies boosted employment in June, before the Labor Department report due Thursday. The U.S. currency rose for a second day versus the euro as Greek attempts to reopen negotiations with creditors faced pushback.

“Whatever the headwinds were that were holding up the economy in the first quarter have obviously faded,” said Richard Franulovich, the chief currency strategist for the northern hemisphere at Westpac Banking Corp. in New York. If the payrolls number is “north of 250,000, it may well help the dollar, and I suspect the euro may trade heavy tomorrow as well as we go into the long weekend and a Greek vote.”

U.S. markets are closed July 3 for a national holiday.

The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 of its major peers, rose 0.7 percent to 1189.33 as of 5 p.m. New York time, reaching the highest closing level since June 5. The currency added 0.8 percent to $1.1053 per euro and 0.6 percent to 123.17 yen.

American companies hired more workers than forecast in June, adding 237,000 jobs, the most in six months, figures from the ADP Research Institute in Roseland, New Jersey, showed Wednesday. Government data released Thursday will show employers increased nonfarm payrolls by 233,000 last month, according to a Bloomberg survey of economists.

Fed Policy

The Fed is scrutinizing incoming data, including on the labor market, for signs the U.S. economy can withstand a rate increase for the first time since 2006. Futures show a 35 percent chance the central bank will increase its benchmark rate from virtually zero in September and a 72 percent chance by December, according to data compiled by Bloomberg.

“The market should be far more focused on nonfarm payrolls than it’s focused on Greece,” said Richard Benson, co-head of portfolio management at Millennium Global Investments Ltd. in London.

Greece’s woes continued to weigh on the euro as German Chancellor Angela Merkel refused to engage with negotiations on any revised deal until after the nation’s July 5 referendum. Greek Prime Minister Alexis Tsipras earlier said he accepted creditors reform proposals as the basis of a compromise. He’s encouraging a no vote in the referendum, saying this will help get a better deal.

The euro is down 4.5 percent this year among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar has gained 5.6 percent, while the yen is up 2.4 percent.

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