Investing.com - The dollar was steady near two-month highs against a basket of the other major currencies on Thursday after strong U.S. jobs data cemented expectations for a Federal Reserve rate hike next week.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 102.16 at 08.47 GMT, not far from the March 2 high of 102.27.
The dollar was boosted after Wednesday’s ADP nonfarm payrolls report showed that the U.S. private sector added 298,000 jobs in February, the largest increase in hiring since March 2006.
The report added to optimism about the U.S. economy and underlined expectations for a rate hike next week as investors looked ahead to Friday’s government employment report for February.
A rate increase at the Fed’s March 14-15 meeting is seen as a near certainty following recent hawkish comments by Fed policymakers, including Chair Janet Yellen.
Futures traders are pricing in around a 90% chance of a hike at next week’s meeting, according to Investing.com’s Fed Rate Monitor Tool.
The dollar climbed against the yen, with USD/JPY rising 0.24% to 114.62.
The pair touched highs of 114.75 on Wednesday, not far from a two-week high of 114.95 set on February 15.
The euro was little changed, with EUR/USD at 1.0547, well below the week’s high of 1.0639 set on Monday, ahead of the outcome of the European Central Bank’s meeting later on Thursday.
The ECB was not expected to announce any change to monetary policy amid concerns over heightened political uncertainty in the euro area.
Recent data has shown that growth and inflation are picking up, adding to pressure on the ECB to tighten policy.
Sterling was at seven-week lows, with GBP/USD at 1.2157.
On Wednesday the UK revised up its economic growth forecasts for 2017 but lowered them for the following three years, in Chancellor Philip Hammond’s first full budget statement since the June Brexit vote.