The dollar was able to climb back to new highs last week, getting a lift from strong U.S. employment and business data as the euro plummeted below $1.11 to an 11-1/2 year low ahead of the launch of quantitative easing by the European Central Bank.
The dollar boosted by the recent increase in U.S. government bond yields landed its highest level since September 2003 against a basket of currencies and was last up 0.60 % at 95.957. Moreover, it struck a record high of 96.041 in trading after the recent economic data releases.
The ADP National Employment Report recently revealed a gain of 212,000 private-sector jobs and economists surveyed by Reuters predicted that the ADP will further show a gain of 220,000 respectively.
Separately, based on the Institute for supply management its services index was 56.9 last February, which was up slightly from 56.7 in January. Experts were actively searching for a reading of 56.5, which was more or less close enough.
The ADP data possibly indicated strength during last week’s potential markets-moving government jobs report for the month of February. What really is essential is that we receive a non-farm print that has close to 235,000 that is expected or higher which will keep the expectations for a Fed interest rate hike roughly near term, which the U.S. dollar is, primarily the key ingredient.
The euro last stood at $1.1072, off 0.90 % for the day, which was slightly below a key support level. It plunged to as little as $1.1072, off 0.90 % for the day and below a key support level. It likewise fell to as little as $1.1066 which was considered its lowest level for the euro against the dollar in more than a decade based on records reported by Reuters.
The euro similarly declined to one-month lows as against the Japanese yen, which remained primarily dormant and flat against the dollar at 119.72 yen to the dollar.
The ECB is expected to announce this week its details of its planned 1.1 trillion euro bond-purchasing programme meant to spur European economies as the Fed prepares to raise its rates for the first time since in more than four years.
There has been more and more impetus behind the greenback in the past week following a month of ordinary data that had left it stressed out to build on six months of gains against all of its major currency peers.
Finally, the dollar index was able to gain approximately 6.3 % so far this year which was assisted by the U.S. economy’s much more improved performance against other major world economic regions in addition to several comparatively higher U.S. yields.