FOREX-Dollar rises ahead of payroll, resumes rise against yen

Band Kevin Buckland

TOKYO, April 1 (Reuters)The dollar extended its rebound against its major peers on Friday, also resuming its rally against the yen, ahead of a key US jobs report that could cement the potential for a 50 basis point rise in Federal Reserve interest rate next month.

The US currency also garnered support due to its status as a preeminent safe haven as peace talks between Russia and Ukraine stumbled, although they are expected to resume later on Friday.

The dollar index =USDwhich measures the greenback against six peers including the euro and the yen, rose 0.10% to 98.420, building on Thursday’s 0.50% rise.

Mid-week it fell to a four-week low of 97.681 amid a month-long consolidation that followed a breathless climb to an over-nine-month high of 99.415.

The Federal Open Market Committee (FOMC) will then decide policy on May 5, with CME Group’s FedWatch tool showing a 71% chance of a half-point rate hike.

Economists predict Friday’s Labor Department report will show nearly half a million U.S. jobs were created last month, with the jobless rate falling as wage growth accelerated.

The dollar index “has been disappointing lately, but has shown some backbone overnight (and) upside potential remains within reach amid continued waves of fiercely hawkish Fedspeak and an aggressive profile frontloading which includes nearly 100 basis points of increases over the next two FOMC meetings,” the Westpac strategists wrote. in a customer note.

They predicted a break above 100 for the dollar index “in the coming weeks”.

The second of two FOMC meetings will be held on June 14-15.

The dollar rose 0.41% to 122.18 yen JPY=EBS, its first gain in four days as the currency pair tracked moves in long-term US Treasury yields. It was little changed this week, after rising 6.5% over three weeks.

“The case for a much higher USD/JPY rally is still compelling, as Fed rate hikes will revolutionize hedging arithmetic for JPY-based investors and sensitivity to hedging costs. rises,” RBC Capital Markets strategists wrote in a note.

“A small portion of this flow is likely to have occurred so far and the March rally was largely fueled by investors outside of Japan anticipating JPY selling domestically,” they wrote. . “If positioning improves, we will revert to buying USD/JPY dips.”

euro EUR=EBS treaded water at $1.10690, following its sharp decline the previous session from a 1-month high of $1.11850 as Ukrainian optimism faded. Even so, it is on track for a weekly advance of 0.82%.

Sterling GBP=D3 slipped 0.07% to $1.31360, taking its loss for the week to 0.36%.

Risk-Sensitive, Commodity-Linked Australian Dollar AUD=D3 was steady at $0.74825, down 0.45% this week after starting the period by touching a nearly five-month high of $0.7540.

cryptocurrency bitcoin BTC=BTSP fell 0.93% to $45,093.74, slipping 3.78% this week after hitting $48,234.00 Monday for the first time since the beginning of this year.

World exchange rates

(Reporting by Kevin Buckland; Editing by Bradley Perrett)

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