The U.S. dollar rose Thursday, benefiting from robust employment data as well as the uncertainty caused by the Middle East turmoil.
At 04:30 ET (08:30 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher to 101.597, not far removed from its recent three-week high.
Strong labor market data boosts dollar
The dollar has received a boost from Wednesday's ADP private payrolls report showing a larger-than-expected 143,000 increase in U.S. jobs last month.
This followed Tuesday's stronger-than-expected reading on U.S. job openings, and has raised expectations for a healthy nonfarm payrolls reading on Friday, which could result in an adjustment in the market's view of the likely pace of Fed easing.
"The pricing for year-end Fed funds continues to largely embed a 50bp cut in either November or December, meaning room for further re-alignment with the Fed's less dovish rhetoric and consequently upside risks for the dollar," said analysts at ING, in a note.
"We sense that the bar for a dollar-negative reaction to US data today and tomorrow is probably higher after Fed Chair Jerome Powell's recent pushback against 50bp reductions."
The market currently sees around a 37% chance of another 50 basis-point U.S. rate cut on Nov. 7, according to the CME Group's (NASDAQ:CME) FedWatch Tool, following the Fed's outsized reduction last month.
The safe-haven U.S. currency also saw demand as tensions escalated in the Middle East following Iran's ballistic missile attack on Israel. (Cay)
Source : Investing.com
