Dollar up following strong economic data

The dollar soared in European trade on Friday, reaching multi-week highs following the release of a slew of strong economic data and investors’ anticipation for the monthly payrolls figures which hinted at the possibility of earlier-than-expected Federal Reserve policy tightening.

The Dollar index soared 0.1% at 90.605, reaching a new three-week high. EUR/USD lowered 0.1% at 1.2113, also a three-week low, while USD/JPY dropped to 110.26. GBP/USD lost 0.1% to 1.4095, sharply below the three-year high of 1.4250 reached Tuesday, and the risk-sensitive AUD/USD fell 0.1% at 0.7653, after falling to its lowest since mid-April overnight.

The dollar rose as some strong economic figures were released on Thursday, bannered by ADP private payrolls, which grew 978,000 in May. Some other indicative figures included the weekly initial jobless claims that placed below 400,000 for the first time since the start of the pandemic, and the Institute for Supply Management’s services index soaring to 64 last month, the highest on record, from 62.7 in April.

Investors now shift their focus on the U.S. nonfarm payrolls due later in the day.