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Dollar Holds Gains Into Asia Despite Jump In Japan Wages

10/6/2017, 1:37:33 PMMarket Analysis
Dollar Holds Gains Into Asia Despite Jump In Japan Wages

Dollar strength held into Asia on Friday even as wages data in Japan came in stronger than expected.

USD/JPY changed hands at 112.83, up 0.01%, while AUD/USD traded at 0.7781, down 0.19%

Japan reported average cash earnings gained 0.9%, compared with a 0.5% gain expected. Markets are shut in South Korea and China.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 93.77, flat.

Overnight, the dollar extended gains and re-approached recent one-and-a-half month highs against other major currencies on Thursday, as a string of upbeat U.S. data added to optimism over the strength of the economy and amid fresh hopes for a December rate hike.

The greenback was boosted after the U.S. Department of Labor said initial jobless claims fell more than expected to 260,000 last week. Additional reports showed that the U.S. trade deficit narrowed in August, as exports climbed to a two-and-a-half year high, while factory orders increased more than analysts had projected.

The dollar was also strengthened after Philadelphia Federal Reserve Bank President Patrick Harker said on Thursday that he is still planning on one more rate hike this year and three next year.

"I still have three rate hikes in for next year, but again we will have to see how the dynamics play out," Harker said, speaking on the sidelines of a conference in Austin, Texas.

The euro weakened after the minutes of the European Central Bank's September meeting showed that members remain concerned over the volatility of the single currency and some suggested that the economy may still need substantial stimulus for a little longer period of time.