© Reuters. Saudi riyal, yuan, Turkish lira, pound sterling, US dollar, euro and Jordanian dinar notes are shown in this illustration
By Stanley White
TOKYO (Reuters) – The dollar was ready to expand gains against major currencies on Monday after the US jobs report at the end of last week showed that the country’s labor market is recovering from the effects of the coronavirus shock.
The focus now shifts to data on the U.S. service sector later on Monday, which is expected to show an acceleration in activity that could further encourage dollar oxen.
In January-March, the dollar placed its best quarter against major currencies for nearly three years thanks to an improved U.S. economy and rising government bonds.
The U.S. currency is likely to build on those gains as investors look for ways to bet on a global economic recovery from the worst of the coronavirus pandemic, analysts said.
“I thought there would be a correction lower in the dollar, but it did not happen,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
“The upward trend of the dollar is very strong. In the new quarter, it may be best for investors to follow this trend.”
The dollar was last quoted at 110.63 yen, not far from its strongest level in a year.
Against the euro, the dollar traded at $ 1.1765, which is close to a five-month high.
The British pound remained stable at $ 1.3824.
The dollar edged up to 0.9423 Swiss francs.
The U.S. economy created more jobs than expected in March, data show Friday. However, there was little reaction in currencies as most major stock and bond markets were closed for the Easter holidays.
Trading may slow again on Monday in Asia, as the financial markets in Australia, China and Hong Kong are also closed, although the bias is that the dollar will strengthen further, analysts said.
A study by the Institute for Supply Management, expected later on Monday, is expected to show that U.S. non-manufacturing activity expanded faster in March, which could support the greenback in its forward march.
Against a basket of six major currencies, there was little change at 92973,
The dollar’s short positions in the foreign exchange market fell last week to the lowest since June last year, data from Commodity Futures Trading Commision shows – another positive sign for greenback.
Elsewhere, the Australian dollar rose to $ 0.7616, while the New Zealand dollar bought $ 0.7028.
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