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U.S. Dollar Strengthens Ahead Of U.S. Jobs Data

The U.S. dollar climbed against its major counterparts in Asian session on Friday on optimism over progress in U.S. tax reform plan and investors awaited the U.S. jobs report amid indications of solid economic growth.

House of Representatives passed a $4.1 trillion budget on Thursday, to help pass a sweeping tax reform bill with a simple majority in the Senate. The GOP tax reform framework unveiled last week proposes tax cuts for corporations, small businesses and individuals.

The Labor Department report is expected to show that the economy may have added 90,000 jobs in September following an increase of 156,000 jobs in August. The unemployment rate is expected to hold at 4.4 percent.

Thursday's data on jobless claims, factory orders and trade balance as well as a slew of Fed speeches continued to support the currency.

Fed Funds Futures are currently pricing in an 84% probability of a 25bps hike in December.

The greenback advanced to more than a 4-month high of 0.7091 against the kiwi, more than 5-week high of 1.2591 against the loonie and near a 3-month high of 0.7743 against the aussie, from Thursday's closing values of 0.7111, 1.2565 and 0.7795, respectively. The next possible resistance for the greenback is seen around 0.69 against the kiwi, 1.27 against the loonie and 0.76 against the aussie.

The greenback spiked up to 0.9800 against the franc, a level unseen since May 30. If the greenback extends rise, 0.99 is possibly seen as its next resistance level.

The greenback that closed Thursday's trading at 112.80 against the yen climbed to a 3-day high of 113.03. The greenback is seen finding resistance around the 114.00 area.

Preliminary data from the Cabinet Office showed that Japan's leading index improved to the highest level seen since early 2014 in August.

The leading index, which measures the future economic activity, rose to 106.8 in August from 105.2 in the previous month.

The greenback strengthened to a 2-day high of 1.1686 against the euro and more than a 4-week high of 1.3073 against the pound, up from yesterday's closing quotes of 1.1812 and 1.3119, respectively. On the upside, 1.15 and 1.29 are likely seen as the next resistance levels for the greenback against the euro and the pound, respectively.

Looking ahead, U.S. and Canadian jobs data for September, U.S. wholesale sales and consumer credit for August as well as Canada Ivey PMI for September are set for release in the New York session.

by RTTNews Staff Writer

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