© Reuters. Dollar steady after strong jobs data fuels rate hike bets
Investing.com – The U.S. dollar was steady on Monday, after rallying on Friday as a stronger than expected bolstered expectations for a faster pace of rate hikes by the Federal Reserve this year.
The , which measures the greenback’s strength against a basket of six major currencies, was at 89.05 by 03:23 AM ET (08:23 AM GMT), after rising 0.6% on Friday when data showed that average earnings rose by the most since 2009.
The strong wage growth data fueled inflation expectations, and underlined the case for the Fed to raise interest rates at a faster pace this year.
Expectations of tightening monetary policy tend to boost the dollar, as rising rates make the currency more attractive to yield-seeking investors.
The Fed left rates unchanged last week but said it anticipated inflation would likely rise in 2018, underlining expectations that borrowing costs will continue to increase. The Fed currently projects three rate hikes for this year.
The jobs report bolstered the dollar, which had fallen to three year lows in late January, pressured lower by a range of factors, including concerns about U.S. trade protectionism and perceptions of narrowing yield advantage.
The euro was a touch lower against the dollar, with dipping 0.12% to 1.2441.
The euro lost 0.46% on Friday, pulling away from a three year high of 1.2537 reached on January 26.
The dollar slipped lower against the yen, with down 0.27% to 109.86 as steep losses on Wall Street on Friday spilled over into . The yen tends to rise in times of market turbulence thanks to its safe haven status.
Sterling was little changed, with at 1.4102 after losing 1% on Friday.
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