US Dollar Extends Rise As Fed Meeting Looms
Sydney-Australia (Dec 7) The US dollar extended its early advance in European deals on Monday, as investors brace for the Fed meeting due next week, with stronger US economy bolstering case for a rate hike for the first time since 2006.
Friday's upbeat US jobs data reinforced optimism that the world's largest economy was well placed to handle an expected increase in interest rates at the Fed's meeting on December 15-16 .
The US has generated a healthy average of 218,000 jobs over the past three months and the jobless rate remained at its lowest level since March 2008 in November, making it highly likely that the Fed will raise rates this month.
Attention now shift towards key economic data due this week, which includes US weekly jobless claims due Thursday, followed by retail sales, producer prices and University of Michigan's consumer sentiment on Friday for further clues about the strength of the economy.
The greenback held steady against the other major currencies in the Asian session.
In European trades, the greenback advanced to a 4-day high of 123.48 against the yen, compared to last week's closing value of 123.09. The greenback-yen pair may find resistance around the 125.00 zone.
Preliminary figures from the Cabinet Office showed that Japan's leading index, which measures the future economic activity, increased in October as expected by economists.
The leading index climbed to 102.9 in October from 101.6 in the previous month. This was also came in line with consensus estimate.
The greenback hit 4-day highs of 1.5054 versus the pound and 1.0802 against the euro, off its prior lows of 1.5115 and 1.0887, respectively. The greenback is seen finding resistance around 1.49 against the pound and 1.07 against the euro.
The greenback, which ended Friday's trading at 0.9953 against the franc, advanced to 1.0026. On the upside, 1.01 is possibly seen as its next resistance level for the greenback-franc pair.
The greenback spiked up to 1.3440 against the loonie, its strongest since September 29 . The next possible resistance for the greenback-loonie pair may be found around the 1.355 region. At last week's close, the pair was quoted at 1.3360.
Bouncing off from its early lows of 0.6741 against the kiwi and 0.7342 against the aussie, the greenback edged up to 0.6660 and 0.7292, respectively. The next possible resistance levels for the greenback are seen around 0.65 against the kiwi and 0.71 against the aussie.
Looking ahead, US labor market conditions index for November and US consumer credit for October are due to be released in the New York session.
At 12:30 pm ET , Federal Reserve Bank of St. Louis President James Bullard is expected to speak on the economy and monetary policy before the 20th Annual Indiana Economic Outlook Luncheon hosted by the Center for Business and Economic Research , Ball State University in Muncie, US
Source: AllianceNews
