The U.S. dollar firmed against its major counterparts in early European deals on Monday, as traders await U.S. jobs data due later this week, for indications of the health of the world’s biggest economy.
The economy is expected to have added 225,000 jobs in April, following an increase of 126,000 jobs last month. Unemployment rate is seen falling to 5.4 percent from 5.5 percent in March.
Strong data would revive hopes for a Fed rate hike at June meeting, as the central bank has made clear that it wants more signs of progress in economic growth before raising rates.
The dollar snapped back from its early weakness on Friday, after data showed that the U.S. manufacturing sector activity continued to expand in the month of April.
According to a report released by the Institute for Supply Management, the purchasing managers index for the U.S. came in at 51.5 in April, unchanged from the reading reported for the previous month. A reading above 50 indicates continued growth in the manufacturing sector, but economists had expected the index to edge up to 52.0.
Nevertheless, the greenback fell by 3.00 percent against the euro and 2.17 percent against the franc in the previous week.
The greenback rose to 4-day highs of 1.1135 against the euro and 0.9383 against the franc, from early lows of 1.1223 and 0.9323, respectively. The greenback ended Friday’s trading at 1.1193 versus the euro and 0.9325 versus the franc. Next key resistance for the greenback may be located around 1.10 against the euro and 0.95 against the franc.
The greenback reversed from its previous lows of 1.5174 against the pound and 119.99 against the yen, recovering to 1.5124 and 120.19, respectively. If the greenback continues its rise, it may challenge resistance around 1.50 against the pound and 122.00 against the yen.
U.S. factory orders data for March is slated for release in the New York session.
At 12:25 pm ET, U.S. Federal Reserve Bank of Chicago President Charles Evans is expected to speak about current economic conditions and monetary policy at the Columbus Economic Development Board’s Annual Meeting in Indiana.
Subsequently, U.S. Federal Reserve Bank of San Francisco President John Williams is expected to speak on “Creating Jobs and Economic Opportunity through Small Business” before the Pacific Community Ventures Luncheon in San Francisco at 3:10 pm ET.
The material has been provided by InstaForex Company – www.instaforex.com