US dollar strengthens

Published: 6 Sep at 12 PM Tags: Euro, Dollar,

The US dollar is close to its highest level in nearly seven weeks against a number of other major currencies as positive jobs data coming out of the US makes it extremely likely that the Federal Reserve will begin to reel in its monetary stimulus programme.

However, the euro has suffered from an announcement by the European Central Bank that it is remaining cautious about signs of growth. The dollar index is currently 82.528 after earlier hitting 82.671. The dollar is at a six-week high against the yen at 100.24 yen, although there has been some dollar sell off in case the payroll data is disappointing.

The euro remains close to its lowest level in seven weeks at $1.3131. Against the pound, the euro is also down to 0.8417. Sterling appears to be holding steady despite a possible rise in interest rates in Britain.

Some analysts are expecting the euro to head further south because of the election in Germany and the possibility that Italy could be heading for a political crisis. A parliamentary election on 22 September will see Angela Merkel seek another term as German Chancellor.

At the moment the markets appear to be largely ignoring the possibility of a military strike by the US against Syria, although this could become more of an issue next week.