Dollar Down, Investors Bet on More Interest Rate Hikes over Upbeat Jobs Report

The dollar was down on Monday morning in Asia, but moves were small as investors bet on more interest rate hikes over an upbeat U.S. jobs report.The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.04% to 102.118 by 11:34 PM ET (3:34 AM GMT).The USD/JPY pair fell 0.21% to 130.59.The AUD/USD pair edged down 0.17% to 0.7195, andthe NZD/USD pair inched down 0.08% to 0.6503. The Reserve Bank of Australia will hand down its policy decision on Tuesday.The USD/CNY pair edged down 0.10% to 6.6538, while the GBP/USD pair inched up 0.05% to 1.2491.China’s Caixin services purchasing managers’ index (PMI) released earlier in the day rose to 41.4 in May from 36.2 in April, contracting for the third month in a row, pointing to a slow recovery despite China’s easing COVID-19 curbs in cities such as Shanghai.China’s CPI and producer price index (PPI) are due on Friday.

The U.S. jobs report released on Friday showed that employers added 390,000 jobs in May, which is above the forecasts prepared by and 436,000 recorded in April. However, the upbeat report added to investors’ bets that the U.S. Federal Reserve remains assertive on inflation.Investors now await the U.S. consumer price index (CPI) data for more clues about monetary policies, which is due on Friday.Eurozone inflation rose to yet another record high in May, the European Central Bank (ECB) will announce an end to bond purchases this week, joining global peers in tightening monetary policy in the face of high inflation. The ECB will also hand down its policy decision on Thursday.Investors are currently pricing in 125 basis points of hikes at the ECB’s four meetings this year.With (euro area) inflation yet to peak, in our view, the onus falls on the ECB to push back against the possibility of a 50bp hike in July,” analysts at Barclays told Reuters.

“However, if President Lagarde were to leave all options on the table, market pricing is likely to continue the advance, providing a basis for EURUSD to recover.”In cryptocurrencies, Bitcoin continued to hover around $30,000 and was slightly firmer at $30,300 in early trade.Dollar Down, Investors Bet on More Interest Rate Hikes over Upbeat Jobs Report