Dollar near 20-year peak ahead of US employment data

The dollar is set to post a third straight week of gains, approaching a 20-year high against other major currencies, with investors focused on US jobs data to be released later on Friday and could reinforce the trend of big interest rate hikes. ‎

The US currency has been rising since US Federal Reserve Chairman Jerome Powell announced in Jackson Hole, Wyoming last Friday that there is a need to keep interest rates high “for some time” in order to rein in inflation.

The dollar index, which measures the performance of the US currency against six other currencies, rose to a new peak it did not reach in two decades at 109.99, led by strong US economic data showing a decrease in unemployment claims.

The strength of the index declined in morning trading on European stock exchanges on Friday, falling by 0.2% to 109.43. However, the index is still on track to rise by about 0.5% this week.

The dollar rose to more than 140 yen for the first time since 1998 yesterday, Thursday, and the yen recorded a new decline to 140.43 per dollar on the same day.

Japanese Finance Minister Shun Suzuki said today, Friday, that the government will take the necessary “appropriate” action

The euro compensated some of its losses yesterday, Thursday, against the dollar, and slowly returned to the level of parity with the US currency, rising by a third of a percentage point to $0.99780.

The European Central Bank meets next week, with markets betting on an unprecedented hike in interest rates by 75 basis points.

The British pound stabilized to a large extent today against the dollar at 1.15 per dollar, to continue the week, declining by about 1.5%.