TOKYO (APP) – The dollar rose against the yen and euro Thursday as a solid US jobs report supplied more evidence of resilience in the US economy, opening the door for another rate hike this year.
Rising oil prices and China’s fresh stimulus measures also boosted investor spirits, as payrolls firm ADP reported that the US private sector added 214,000 jobs in February, better than the 190,000 expected.
The report on Wednesday came ahead of Friday’s US Department of Labour February jobs figures and after better-than-expected reports on the sluggish US manufacturing sector, construction spending and auto sales. Still, fears about a slowdown in China and weak global growth were likely to weigh on the chances that the Federal Reserve will pull the trigger on multiple rate hikes this year, analysts said.
Raising interest rates is a plus for the dollar as it attracts investors to dollar-denominated assets.
“With the uncertainties around the world, particularly emanating out of China, I don’t think that the global economy, including the internal economy within the US, is strong enough to take several rate hikes this year,” Derek Mumford, a director at Rochford Capital Pty in Sydney, told Bloomberg News.
“Further gains in the US dollar are likely to be limited because of the uncertainty. It’s a flip of a coin if rates go up at all in 2016,” he added.
In Tokyo, the dollar rose to 113.96 yen from 113.46 yen in New York and 112.27 yen earlier this week.
The euro slipped to $1.0857 from $1.0865 while it edged up to 123.74 yen against 123.27 yen in US trade.
Emerging currencies got a boost against the dollar as crude prices climbed toward $35 a barrel. The oil-linked Malaysian ringgit and South Korean won led the gains.