TOKYO- The dollar climbed against major peers on Monday, reaching a four-month high versus the euro, as traders positioned for an earlier tapering of Federal Reserve stimulus.
The greenback strengthened as far as $1.1742 to the single currency, extending a 0.6 percent pop from Friday, when a strong US jobs report stoked bets that a reduction in asset purchases could start this year and higher interest rates could follow as soon as 2022.
The dollar index, which tracks the US currency against six rivals, rose to a two-week top 92.915.
The dollar also hit an almost two-week high of 110.37 yen.
“US payrolls were a game-changer,” Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a client note.
The dollar index is eyeing a close above 93, while the currency could head for $1.1704 per euro, Weston wrote, adding that it could climb further versus the yen too should US yields continue to tick higher.
The benchmark 10-year Treasury yield jumped 8 basis points on Friday to a two-week high of 1.3053 percent. There was no trading in Tokyo on Monday with Japan shut for a national holiday. Singapore markets were also closed.
Friday’s non-farm payroll report showed jobs increased by 943,000 in July compared with the 870,000 forecast by economists in a Reuters poll. Numbers for May and June were also revised up.
The Fed has made the labor market recovery a condition of tighter monetary policy, and most officials back the view that a jump in inflation will prove transitory, though there is debate over how prolonged it could be.
