Dollar near multi-month highs ahead of labor market numbers

01/07/2021

It looks like the bullish momentum in the USD pairs will continue throughout the rest of the week as the dollar index rose to its highest in three months. 

On Wednesday, the ADP report showed a greater-than-forecast 692,000 jobs last month, above the 600,000 jobs expected. The greenback and stocks strengthened after the report.

Later in the day, jobless claims will be released, with initial jobless claims for the week ended June 26 are seen falling to 390,000 from 411,000 in the previous period. Likewise, continuing claims are expected to decline to 3.382 million from 3.39 million.

Additionally, June's non-farm payrolls and unemployment rate are due Friday, usually causing large volatility in the financial markets. 

The greenback continues to strengthen, with the EURUSD pair falling below its June lows to trade at 3-month lows near 1.1840. In addition, the USDJPY pair pushed above 111.30 for the first time since March 2020. 

Despite the dollar's strength, precious metals surged yesterday, and they are also seen higher today - gold near 1,780 USD and silver trading at 26.20 USD.
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