Dollar Gets Lift from Jobs Data

The U.S. Dollar rose broadly, and the U.S. Dollar Index held close to a multi-months peak during the Asian trading session following the release of better than expected private sector jobs data which suggested that the world’s largest economy is finally showing signs of improvement. According to ADP, 198,000 new jobs were added last month, giving rise to speculation that tomorrow’s non-farms payroll data could also hold a welcome surprise. Also helping to give the greenback a boost is speculation that while other major central banks such as the Bank of Japan, ECB and Bank of England are considering additional easing measures there is the increasing likelihood that the Federal Reserve might soon consider tightening.

The U.S. Dollar Index, which acts as a gauge of the greenback’s worth relative to a weighted basket of its major rivals, was trading at 82.533 .DXY, retreating from a 6-month peak of 82.604 .DXY; since the beginning of February, the index has gained more than 4%. The USD/JPY pair was trading at 94.00 Yen, edging close to the nearly 3-year high of 94.77 Yen which had been struck late last month. The GBP/USD pair was trading at a session low of $1.4965 before recovering to $1.4990, though expectations are high that the Bank of England will today move to increase their asset purchasing scheme in an effort to pull out of recession.