Dollar has edge as economic data points to more gains

The dollar was set to extend its gains against major currencies on Monday after the U.S. jobs report late last week showed the nation’s labor market was recovering from the impact of the shock coronavirus.

The focus is now on data on the US services sector, due later Monday, which should show an acceleration in activity that could further encourage bulls in the dollar.

In January-March, the dollar posted its best quarter against major currencies in nearly three years thanks to an improving US economy and higher yields on Treasuries.

The US currency is expected to build on these gains as investors seek ways to bet on a global economic recovery from the worst of the coronavirus pandemic, analysts said.

“I thought there would be a downward correction in the dollar, but that didn’t happen,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“The dollar’s uptrend is very strong. In the new quarter, perhaps the best thing for investors to do is follow this trend.”

The dollar was last listed at 110.63 yen, not far from its highest level in a year.

Against the euro, the dollar traded at $ 1.1765, which is near a five-month high.

The British pound remained stable at $ 1.3824.

The dollar climbed back to 0.9423 Swiss francs.

The US economy created more jobs than expected in March, data showed Friday. However, the reaction of currencies was hardly seen, with most of the major stock and bond markets closed for the Easter holidays.

Trade could be moderate in Asia again on Monday, with financial markets in Australia, China and Hong Kong also closed, although the bias is for the dollar to strengthen further, analysts said.

An Institute for Supply Management survey scheduled for later Monday is expected to show that non-manufacturing activity in the United States grew at a faster pace in March, which could support the greenback in its forward march.

The dollar index against a basket of six major currencies was little changed at 92.973.

The dollar’s short positions in the currency market fell last week to their lowest since June of last year, according to data from the U.S. Commodity Futures Trading Commission – another positive sign for the greenback.

Elsewhere, the Australian dollar edged up to $ 0.7616, while the New Zealand dollar bought up $ 0.7028.