The dollar extended its gains against the Japanese yen on Monday, with a better-than-expected July jobs report in the U.S. triggering fears of aggressive rate hikes by the Federal Reserve.
Price Movement: The USD/JPY pair was trading at 135.28 on Monday morning Asia session, its highest since end-July. The move comes after the dollar hit a two-month low of 130.44 against the yen in the first week of August. The dollar index, which measures the strength of the greenback against a basket of currencies, was trading close to 106.26 on Monday morning.
What Happened: U.S. nonfarm payrolls increased unexpectedly to 528,000 jobs in July, registering a 19th straight month of expansion. Traders are currently factoring in another 75 basis points rate hike by the Fed in its September meeting, Reuters reported. A rate hike or an expectation of such an event generally boosts the dollar.
Key Upcoming Data: Traders will keenly watch out for the U.S. consumer price index, set to be released on Wednesday.
Expert Take: Chris Weston, head of research at Pepperstone, told Reuters it will likely take a consumer price index figure below 8.4% to get the odds of a 50-bps hike in September as the default setting, although that “seems unlikely.”
Image and article originally from www.benzinga.com. Read the original article here.