© Reuters. The dollar is stable after the employment
The u.s. dollar is steady on Monday, after gains Friday after an employment report stronger than expected, with stronger expectations for a faster pace of rate hikes by the federal Reserve this year.
The index dollar, which measures the greenback’s strength against a basket of currencies, is at 89.05 at 03:23 AM ET (08:23 AM GMT), after rising 0.6% Friday when figures showed an increase of the average wage.
The solid data on wage growth has fuelled inflation expectations, and stressed the need for the Fed to raise interest rates at a faster pace this year.
Expectations of tightening of monetary policy tend to boost the dollar, higher interest rates making the currency more attractive for investors in search of yield.
The Fed has left rates unchanged last week, but has indicated that inflation is expected to increase by 2018, noting that borrowing costs will continue to increase. The Fed currently provides for three rate increases for this year.
The employment report supported the dollar, which had declined to a low of three years to the end of January, under the pressure of various factors, including concerns regarding trade protectionism in u.s., and the perception of a narrowing of the performance.
The euro declined against the dollar, with the EUR / USD down 0.12% to 1,2441.
The euro lost 0.46% as of Friday, turning away from the highest three years of 1,2537 reached on the 26th of January.
The dollar slipped against the yen, with USD / JPY down 0.27% to 109.86, while heavy losses on Wall Street on Friday spilled over the asian markets. The yen tends to rise in times of market turbulence due to its safe haven status.
The british pound was little changed, with GBP / USD at 1,4102 after having lost 1% on Friday
