By Gina Lee
Investing.com – The dollar was up on Wednesday morning in Asia, remaining close to highs for 2021 even amid volatile trading earlier in the session. Investors turned their attention to an interest rate hike in New Zealand as well as to the latest U.S. jobs report due later in the week.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.06% to 94.047 by 10:46 PM ET (2:46 AM GMT).
The USD/JPY pair edged up 0.13% to 111.59.
Investors have turned to the safe-haven dollar recently as the U.S. Federal Reserve to begin asset tapering within 2021 and hike interest rates in 2022. The U.S. jobs report, including non-farm payrolls, is due to be released on Friday and is seen as crucial to the Fed’s timeline for asset tapering.
A large miss on market expectations for around 428,000 jobs to have been added in September could dampen expectations for Friday’s broader figure, Commonwealth Bank of Australia (OTC:CMWAY) analyst Carol Kong told Reuters.
“We maintain our view that a solid improvement in Friday’s payrolls will prompt the Fed to announce a taper in November,” she said.
In other central bank news, the Reserve Bank of New Zealand (RBNZ) hiked its interest rate to 0.50% from the previous month’s 0.25% as it handed down its policy decision earlier in the day. The Reserve Bank of India will also hand down its policy decision on Friday.
Meanwhile, commodity-linked currencies were boosted by oil, which was down on Wednesday but still remaining near three-year highs. The Canadian dollar traded near a one-month peak and is close to testing its 200-day moving average.
The Australian dollar, a fellow risk-sensitive currency, also got a boost but concerns about slowing economic growth in China, a top market for Australian commodity exports, capped gains.