The U.S. dollar was mainly steady on Monday as traders contemplated last week’s strong U.S. employment report. They are now waiting for the data on the U.S. services sector to affirm a solid economic recovery from the COVID-19 crisis.
The U.S. dollar gained the most against major currencies in the last quarter (January-March) compared to last three years data thanks to an improving U.S. economy and increasing Treasury yields.
Analysts think that the greenback will likely build on those gains as traders look for ways to bet on a global economic rebound, hoping that the worst of the coronavirus pandemic is behind us.
Masafumi Yamamoto, the chief currency strategist at Mizuho Securities, noted that he expected a lower dollar correction. That didn’t happen, however. The currency’s upward trend proved to be very strong. Yamamoto added that investors’ best thing to do is to follow this trend in the new quarter.
On Friday, new data showed that the U.S. economy created more jobs than expected in March. However, this news caused a slight reaction on the market, as most major stock and bond markets were closed for the Easter holidays.
Thus far, the greenback outlook remains solid as the latest data points to the U.S. economy’s strengthening recovery. The Institute for Supply Management will release a survey later on Monday. Investors expect it to show non-manufacturing activity increased at a faster rate in the U.S. in March.
How Did the U.S. Dollar Trade Against Other Currencies?
The U.S. dollar traded at 110.62 Japanese yen on Monday, near its strongest level in a year. The currency exchanged hands at $1.1760 against the euro, remaining close to a five-month high.
Against the Swiss franc, the greenback soared to 0.9430. The British pound was steady at $1.3826. The U.S. dollar index changed insignificantly at 93.015 against a basket of six major currencies.
Meanwhile, trading was subdued in Asia on Monday. The Australian dollar climbed up to $0.7613, while the New Zealand dollar stood at $0.7027.