Dollar ticks up as case for March Fed hike grows

The dollar ticked up on Monday amid rising bets U.S. inflation will bolster the case for higher interest rates while the European Central Bank’s dovish stance on rising prices weighed on the euro.

The dollar had met with selling late last week after a weaker-than-expected headline U.S. job-creation figure squeezed traders out of long dollar positions.

But analysts said better-than-expected unemployment numbers and U.S. inflation figures expected to show headline CPI at a red-hot 7% year-on-year on Wednesday, make a good case for interest rates to rise sooner rather than later.

In morning trading in Europe, the dollar index, which measures the greenback against major peers, was up 0.18% at 95.964.

The greenback firmed 0.1% on the yen to 115.66, close to last week’s five-year high of 116.35 in volumes thinned by a holiday in Japan.

The euro was losing 0.3% against the dollar at $1.1327.

Investors believe the ECB is still far behind the Fed in the tightening cycle despite data showing euro zone inflation jumped to 5% in December.

Cryptocurrencies have faced pressure from broad selling in risk assets at the start of this year, but were steady in Asia after bitcoin managed to hold support at $40,000 through weekend trade.

Bitcoin last bought $41,783 and ether $3,173