Investing.com - The broadly stronger dollar rose to three-month highs against the yen on Friday as a robust U.S. jobs report underlined expectations for a mid-year rate hike by the Federal Reserve.
The Labor Department reported that the U.S. economy added 295,000 jobs in February, far more than the 240,000 forecast by economists. The unemployment rate ticked down to 5.5% from 5.7% in January, the lowest since May 2008. Economists had forecast the unemployment rate would fall to 5.6%.
The strong jobs report solidified expectations for higher U.S. interest rates.
USD/JPY hit highs of 121.27, the most since December 8 and was last at 120.80, 0.57% higher for the day.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, jumped 1.39% to 97.74 late Friday, the highest since September 2003.
EUR/USD dropped 1.69% to 1.0841, a day after European Central Bank President Mario Draghi confirmed that it will begin purchasing euro zone government bonds on Monday under its new quantitative easing program.
The combined monthly asset purchases will amount to €60 billion per month and are expected to run until September 2016, or until the ECB sees that inflation is on a “sustained path” to its target of close to, but below, 2%.
Draghi also said that the ECB expects to see higher growth and inflation over the coming years.
The euro was also sharply lower against the yen, with EUR/JPY dropping 1.16% to 1130.96 in late trade, the weakest since January 26.
In the week ahead, markets will be watching talks on Greece by euro zone finance ministers in Brussels on Monday, while Thursday’s U.S. retail sales report will also be closely watched for further indications on the strength of the recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Tuesday as there are no relevant events on this day.
Monday, March 9
Japan is to release data on the current account and revised data on economic growth.
Wednesday, March 11
Japan is to produce data on core machinery orders.
Thursday, March 12
The U.S. is to produce data on retail sales and initial jobless claims.
Friday, March 13
The U.S. is to round up the week with data on producer prices and consumer sentiment.