Aussie gains on AIG construction index
The Aussie received an early bump higher on Monday in Asia with construction data for July aiding views on an otherwise light data day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 93.37.
Ahead in th week, Friday’s U.S. inflation figures are seen as key as are comments by Fed speakers on interest rate and balance sheet unwinding views.
Last week, the U.S. dollar rallied against a basket of the other major currencies on Friday, bolstered by a strong U.S. jobs report for July and comments by a Trump administration official about tax reform.
The Labor Department reported Friday that the U.S. economy added 209,000 jobs last month, beating expectations for a gain of 183,000 and the unemployment rate ticked down to 4.3%.
The report also showed that average hourly earnings increased by 9 cents or 0.3% last month to $26.36 an hour, the largest monthly increase since October.
Wages increased by 2.5% on a year-over-year basis, matching June’s increase.
The uptick in wage growth indicated that inflationary pressures are firming. Markets believe stronger inflation will enable the Federal Reserve to stick to its plans for a third interest rate hike this year.
The dollar received an additional boost after Gary Cohn, director of the White House National Economic Council, revived hopes for tax reform in an interview on Bloomberg TV.
The dollar has come under pressure in recent months amid doubts over whether the Fed would raise rates again this year and diminished expectations for tax reform and fiscal stimulus under the Trump administration.