Investing.com - The dollar pushed higher against the yen on Monday and was little changed against the euro in holiday-thinned trade as Friday’s U.S. jobs report for January lent support.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 97.04 after finishing Friday’s session higher thanks to the largely upbeat nonfarm payrolls report.
The U.S. Department of Labor reported that average hourly earnings rose 0.5% last month, the largest gain in a year.
The economy created 151,000 jobs last month, the lowest number since September and less than the 190,000 forecast by economists’.
Despite the slowdown in jobs growth the unemployment rate fell to 4.9%, the lowest level since February 2008.
The pick-up in wage growth bolstered the outlook for inflation and increased the likelihood that the Federal Reserve could raise interest rates this year.
Higher interest rates would make the dollar more attractive to yield-seeking investors.
USD/JPY was up 0.22% to 117.13, up from Friday’s two-and-a-half week lows of 116.27.
Trade volumes remain thin in Asia on Monday with markets in China closed for the five-day long Lunar New Year holiday.
EUR/USD was trading at 1.1150, off the three-month highs of 1.1244 hit on Friday.
The dollar had fallen sharply in the previous two sessions as weak U.S. economic reports and dovish comments by a Fed official raised doubts over how much the central bank could hike rates in 2016.
In the week ahead, investors will be looking to Wednesday’s testimony by Fed Chair Janet Yellen and Friday’s data on U.S. retail sales for further indications on the strength of the world’s largest economy.
Friday’s preliminary report on euro zone fourth quarter growth will also be closely watched amid heightened expectations for more easing by the European Central Bank in the coming months.