Dollar firms to seven week highs against the yen

The dollar hit seven-week highs vs the yen today, as investors awaited U.S. jobs data ahead of next week’s Federal Reserve meeting, while weak inflation figures pushed the Norwegian crown to four-month lows against a stronger euro, Reuters reported.

The single currency rose a third of a percent to a four-day high of $1.0619, having been boosted by comments from European Central Bank head Mario Draghi on Thursday that investors saw as somewhat hawkish.

The ECB removed from its statement a reference to using all available measures to induce growth and inflation, driving markets to price in an interest rate hike in early 2018, on expectations the ECB will wind down its stimulus programme as the European economy improves.

The dollar climbed almost half a percent to 115.495 yen, its highest since January 20, leaving it up nearly 1-1/2% for the week.

The dollar index, which tracks the greenback against a basket of six major rivals, was flat at 101.85. It was on track for its fifth straight week of gains – its best run in eight months – after a quarter-of-a-percent rise this week.

Markets are now pricing in an almost 90% chance of a Fed hike next week, according to Reuters data.

In the near term it’s going to be quite tough for there to be further dollar strength, given how well-priced the Fed meeting is next week, and also just how much the market has priced for the year now as a whole,” said currency strategist Hamish Pepper at Barclays in London.


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