Investing.com - The dollar was holding steady against a currency basket on Monday as Friday’s strong U.S. jobs report underpinned expectations for higher interest rates and investors mulled heightened trade tensions and geopolitical risks.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 96.28 by 03:52 AM ET (08:52 AM GMT).
The dollar remained supported after the Labor Department reported that U.S. job growth rebounded sharply in October and wage growth accelerated at the fastest pace in more than nine years.
The robust figures indicated that the labor market is continuing to tighten, underlining the case for the Federal Reserve to hike interest rates again this year and beyond.
The Fed will begin its two day meeting on Wednesday, with markets anticipating no change to interest rates ahead of a widely expected rate hike in December.
The dollar was holding steady against the yen, with USD/JPY changing hands at 113.18.
Trade tensions between the U.S. and China remained in focus after weak Chinese service sector data overnight added to fears over a slowdown in the world’s second largest economy.
Hopes for an imminent trade agreement between Washington and Beijing have faded after an economic advisor to U.S. President Donald Trump said late last week that there were no such plans in the works.
Investors were also looking ahead to the U.S. mid-term elections on Tuesday. Voters will decide key races in Congress and state governments and the results could influence the Trump administrations ability to pass additional tax and trade reforms.
The euro was little changed against the dollar, with EUR/USD at 1.1392.
Sterling hit two week highs of 1.3041 overnight, before pulling back to 1.3008 on optimism over a Brexit deal and indications from the Bank of England that it might need to raise interest rates more quickly in the event of a smooth exit from the EU.