Early trade in NY: Dollar little changed to slightly higher

NEW YORK: The dollar was little changed to slightly higher on Thursday, with most currencies trading within narrow ranges, as investors looked to Friday’s US nonfarm payrolls report for clues on whether the Federal Reserve will start to reduce monetary stimulus sooner rather than later.

The US dollar index, which measures the greenback against six major counterparts, rose to a three-month high of 92.547 earlier in the session. It last traded modestly higher at 92.381.

The index in June posted its best monthly performance since November 2016, driven in part by the Federal Open Market Committee’s (FOMC) unexpected hawkish shift at a meeting during the month. Fed forecasts released after the June FOMC meeting pencilled in two interest rate hikes by the end of 2023.

Against the yen, the dollar hit a 15-month high of 111.625 yen, and was last up 0.4% at 111.525.

In midmorning trading, the euro was flat to higher at $1.1863 after earlier dipping as low as $1.1837 for the first time since April 6. The euro recovered after data which showed euro zone purchasing manager’s indexes (PMIs) were higher than expected.

The Aussie dollar, seen as a proxy for risk appetite, slid 0.2% to $0.7488, after earlier hitting its lowest since Dec. 21, as Australia’s major centers of Sydney, Brisbane, Perth and Darwin are all under lockdown.