Investing.com - The dollar remained just below four-year highs against a basket of other major currencies in quiet trade on Monday as investors consolidated gains after a strong jobs report on Friday fuelled expectations for an early hike in interest rates.
The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, was down 0.43% to 86.41, off Friday’s four-year peaks of 86.79.
It notched up its twelfth consecutive weekly gain last week, the longest rally since the index was created in 1971.
The dollar strengthened broadly after data on Friday showed that the U.S. economy added 248,000 jobs in September, well ahead of forecasts for jobs growth of 215,000. The unemployment rate ticked down to 5.9%, the lowest level since July 2008.
The dollar has rallied in recent months, amid expectations that the Federal Reserve is growing closer to raising interest rates, while central banks in Europe and Japan look likely to stick to a looser monetary policy stance.
USD/JPY was down 0.54% to 109.19, off Friday’s highs near six-year highs of 109.86.
The Bank of Japan was to conclude its two-day policy meeting on Tuesday and was expected to leave monetary policy on hold, despite a recent slew of weak economic data.
The euro was also higher, with EUR/USD rising 0.40% to 1.2565, easing back from Friday’s two year trough of 1.2499.
The euro’s gains came in spite of data on Monday showing that German factory orders fell 5.7% in August, compared to expectations for a 2.5% decline. It was the largest drop since early 2009, adding to concerns over the outlook for the euro zone’s largest economy.
The European Central Bank refrained from implementing additional stimulus measures at its meeting last week, indicating that it will wait to see the effects of recent stimulus measures on the region’s economy.
The pound eased off of 11-month lows, with GBP/USD edging up 0.20% to 1.6002, while USD/CHF slipped 0.22% to 0.9651.
The commodity linked dollars also gained ground, with AUD/USD climbing 0.69% to 0.8736 ahead of Tuesday’s rate review by the Reserve Bank of Australia.
NZD/USD gained 0.37% to 0.7792, while USD/CAD dropped 0.58% to 1.1183. In a report, the Richard Ivey School of Business said that its purchasing managers' index for Canada rose to a 10-month high of 58.6 last month from a reading of 50.9 in August. Analysts had expected the index to rise to 53.0 in September.