The dollar was within 0.1 percent of the strongest in three months versus the euro as an increase in Treasury yields and jobs data tomorrow predicted to show an improving labor market boosted the U.S. currency.
Demand for the single currency was limited before a report today projected to show euro-area inflation slowed in May, strengthening the case for the European Central Bank to expand easing on June 5. Australia’s dollar held a drop from yesterday, its biggest in two weeks, as economists forecast the Reserve Bank will maintain record-low interest rates at a policy meeting today. China, Australia’s largest trading partner, will release reports on services and manufacturing.
“The dollar will be swayed by the employment data this week, along with moves in U.S. rates,” said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp. in New York. “The decline in Treasury yields we saw in May is starting to reverse, supporting the dollar.”
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