US Dollar is at its strongest in three years against major currencies following the jobs report released on Friday amid growing market expectations that the scaling back the Federal Reserve's stimulus program will come as early as September
The U.S. jobs data showed a better than expected result of 195,000 new jobs to their payrolls in June. The result increased the monthly average to 196,333 jobs per month in the second quarter. This confirms Fed expectations of 200,000 new jobs each month.
Analysts have noted a gaining momentum being built around the USD and is seen to continue in the second half of 2013 especially when the Fed starts to normalize its monetary policy. This is in contrast to monetary policy outlooks for the European Central Bank, Bank of England, and the Bank of Japan where they are seen to be dovish relative to their economic circumstance. These suggest further upside for the dollar against the euro, sterling, and the yen.
The euro traded at around US$1.2821 while the yen rose to as high as JPY101.54 to the dollar on Friday. Credit worries in China, however, have served only to limit investor risk. If China faces more pressure, the dollar/yen could dip some more, strengthening the yen instead.
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