Dollar Spikes Up Ahead Of U.S. Jobs Data

The U.S. dollar strengthened against its major rivals in early European deals on Thursday, as traders await U.S. jobs data due later in the day to gauge whether the Federal Reserve will raise interest rates as early as September.

Data from the Labour Department may show the economy to have added 230,000 jobs in June, following a gain of 280,000 jobs in May. The jobless rate is seen dipping to a seven-year low of 5.4 percent.

The report is being released one day ahead, due to the Independence Day holiday on Friday.

The data could provide more clarity about the timing of Federal Reserve rate hike, as its policy makers had reiterated that the timing of first interest rate hike would be determined by economic data.

A slew of strong economic data released on Wednesday indicated that the economic recovery is gathering pace, after a first-quarter slump. The currency has been trading higher after these data.

In European trading, the greenback climbed to a 6-day high of 123.59 against the yen, up from Wednesday's closing value of 123.16. The greenback is seen finding resistance around the 125.00 zone.

Data from the Bank of Japan showed that Japan's monetary base surged 34.2 percent on year in June, coming in at 325.047 trillion yen.

That follows the 35.6 percent spike in May.

The greenback advanced to 1.5580 against the pound, its strongest since June 16. The next possible resistance for the greenback may be located around the 1.55 level. The pair was worth 1.5610 at yesterday's close.

Data from the Nationwide Building Society showed that U.K. house prices declined unexpectedly in June.

House prices dropped 0.2 percent month-on-month in June, confounding expectations for a 0.5 percent rise. This was the first fall in four months and reversed a 0.2 percent rise in May.

The greenback resumed its early advance against the Swiss franc, approaching nearly a 4-week high of 0.9492. Continuation of the greenback's uptrend may lead it to a resistance surrounding the 0.96 area. At Wednesday's close, the pair was quoted at 0.9478.

The greenback firmed to a 2-1/2-month high of 1.2625 against the loonie, 3-day high high of 0.7598 against the aussie and a 5-year high of 0.6669 against the kiwi, compared to yesterday's closing values of 1.2586, 0.7644 and 0.6731,respectively. If the greenback continues rally, it may challenge resistance around 1.28 against the loonie, 0.75 against the aussie and 0.65 against the kiwi.

On the flip side, the greenback eased back from an early 3-day high of 1.1031 against the euro with the pair trading at 1.1074. The pair was valued at 1.1051 when it ended yesterday's trading.

Looking ahead, U.S. weekly jobless claim for the week ended June 27, U.S. jobs data for June and factory orders for May are set to be announced in the New York session.