The dollar rose versus the yen on Monday, extending its gains after strong US job data strengthened the prospects for faster economic growth and increased the probability of a Federal Reserve interest rate increase this year.
The US economy added 255'000 jobs last month, the nonfarm payrolls report showed on Friday. This figure was way above economists' median forecast of a 180,000 rise. Average hourly earnings also rose more than expected to 0.3% from 0.1% previously while June's payrolls figure was revised higher to 292'000.
USD/JPY climbed to 102.20, up 0.4 percent in early Monday trade and extending its slow recovery from Tuesday's three-week low of 100.68. EUR/USD dropped to 1.1046 on Friday, its lowest level in over a week. It trades at 1.1086 up 0.10 percent early on Monday. Cable dropped to 1.3021, its lowest since early July, as it continued to weaken following Thursday's rate cut by the Bank of England.
Despite strong jobs data, investors still think the Fed will have to play it safe given uncertainty from Brexit and slowdown in China. Fed fund rate futures now price in a 20% chance of a rate cut in September and less than 50% for a rate cut in December.
Oil prices climbed higher early trading on Monday, lifted by reports of renewed talks by some members of OPEC to freeze output. WTI crude futures were up above $42 per barrel on Monday.
