Dollar Holds Three-Day Gain as Jobs Data May Spur Fed on Rates

No June Rate Hike Keeps Fed Off Table All Rear: Pursche
  • Gauge of the greenback rises most in three days since November
  • Economists predict U.S. payrolls climbed by 200,000 in April

The dollar held the biggest three-day advance since November, before U.S. employment data Friday, as policy makers reiterated that June’s Federal Reserve meeting will be "live" for a potential interest-rate increase.

The currency strengthened against most major peers Thursday as St. Louis Fed President James Bullard said the labor market looks robust, and indicated that he’s keeping an open mind about whether the economy will warrant a rate boost at the next meeting of the FOMC, on June 14-15. San Francisco Fed President John Williams said that all signs are pointing in the right direction on jobs, and two or three rate hikes this year seem reasonable.

“The market has been fairly bearish on the dollar over recent weeks, and it looks like we’re getting a bit of a reversal to that ahead of the jobs data on Friday,” said Minh Trang, a senior foreign-exchange trader at Silicon Valley Bank in Santa Clara, California. “The fear is that another solid jobs number will increase the potential of a rate hike in June -- this follows comments that June action is on the table.”

The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 peers, was little changed as of 8:27 a.m. in Tokyo, after rising 0.4 percent Thursday. The 1.6 percent, three-day gain was the most since the period ended Nov. 6. The U.S. currency was unchanged at 107.26 yen Friday and was at $1.1404 per euro from $1.1405.

The Fed is scrutinizing data before its June meeting for signs the U.S. economy is able to withstand tighter policy after raising its rate target in December for the first time since 2006. The Labor Department report is forecast to show the third straight month with payroll gains of 200,000 or greater, signaling the jobs market remains a strong sector within the U.S. economy.

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