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US dollar set to achieve best month in 4½ years

30 Jun 2021 03:05 PM

The US dollar rose during trading today and is on its way to achieve its largest monthly rise since November 2016, supported by traders' fears ahead of US labour market data and concerns about the spread of the Delta coronavirus variant.

The dollar has jumped about 2.5% against a basket of currencies this month, mostly in the wake of a surprisingly optimistic shift in Fed rate hike expectations, and traders see it could move sharply in either direction if this week's jobs data provide more evidence to pressure on policy makers.

Commodity currencies took the biggest losses during the day, after the Australian and New Zealand dollars fell about 0.7% against the dollar on Tuesday while the Canadian dollar lost about 0.5%.

The US dollar index, which measures the greenback against a basket of six major currencies, rose at 92.18, after touching a one-week high of 92.19 on Tuesday, following the better-than-expected US private sector employment data that adding 692 thousand jobs in June. Last month reading, down to 886 thousand jobs.

The US non-farm payroll is expected to add about 700 thousand jobs in June, following figures that disappointed the market last month. Along with the data, a new surge in global coronavirus infections and restrictive measures to contain them have limited currency movements.

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