* Dollar index near 2 1/2-month half after best month since
2016
* Dollar and other havens bid as Delta variant spreads
globally
* Aussie approaches 6-month low with Sydney, Brisbane in
lockdown
By Kevin Buckland
TOKYO, July 1 (Reuters) - The dollar hit a fresh 15-month
high versus the yen and hovered near multi-month peaks against
other major peers on Thursday, ahead of a key U.S. jobs report
that could offer clues on when the Federal Reserve will start to
pare back stimulus.
The U.S. currency rose as high as 111.165 yen for
the first time since March 26, 2020, before trading essentially
flat compared to Wednesday at 111.095.
The dollar index, which measures the greenback
against six counterparts, held just below a 2 1/2-month top of
92.451 reached the previous session, edging up on the day to
92.415.
The index posted its best month since November 2016 in June,
driven by the Federal Open Market Committee (FOMC)"s surprise
hawkish shift in the middle of that month, when policymakers
signalled two interest rate hikes by the end of 2023.
Traders are looking to Friday"s U.S. nonfarm payrolls report
for confirmation of that outlook, with economists polled by
Reuters expecting a gain of 700,000 jobs last month, compared
with 559,000 in May, and an unemployment rate of 5.7% versus
5.8% in the previous month.
The greenback extended gains on Wednesday after data showed
U.S. private payrolls increased by a greater-than-expected
692,000 jobs in June.
"I see the balance of risk skewed to an above-consensus
print" for nonfarm payrolls, Chris Weston, head of research at
broker Pepperstone in Melbourne, wrote in a note to clients. "A
payrolls north of 800k could get U.S. bond yields higher and put
a further bid in the USD."
If the euro breaks convincingly below current levels versus
the dollar, "this could be a magnet to attract USD flow," he
said, adding "JPY seems universally weak."
The euro edged down to $1.1851 after dipping as
low as $1.1845 on Wednesday for the first time since April 6.
The benchmark 10-year U.S. Treasury yield
slipped as low as 1.4630% in Asia before edging up to 1.4747%.
Safe-haven assets including Treasuries, the dollar and the
yen have been supported by the spread of the highly contagious
Delta variant of COVID-19, which is threatening the global
reopening narrative.
Indonesia, Malaysia, Thailand and Australia are all battling
outbreaks of COVID-19 and tightening curbs, and Spain and
Portugal announced restrictions for unvaccinated British
tourists.
The Aussie dollar, seen as a proxy for risk
appetite, slid 0.2% to $0.7488, approaching last week"s
six-month low at $0.7478, with Australia"s major centres of
Sydney, Brisbane, Perth and Darwin all under lockdown.
The Reserve Bank of Australia will meet next Tuesday to
decide on policy, and officials have already flagged it will
announce its decisions on the fate of its three-year yield
target as well as its broader quantitative easing programme,
which is set to end in September. RBA Governor Philip Lowe will
also hold a news conference afterward, in a break from recent
procedure.
"If the RBA maintains a dovish tilt and does not take a step
towards ending unconventional monetary policy, AUD is unlikely
to regain losses sustained since the FOMC meeting," Commonwealth
Bank of Australia strategist Joseph Capurso wrote in a client
note.
"AUD will remain heavy for the next few weeks at least,"
possibly testing $0.7442, he said.
Sterling slipped 0.1% to $1.38115, edging toward a
recent two-month low of $1.37865.
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Currency bid prices at 0457 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.1849 $1.1855 -0.05% -3.02% +1.1861 +1.1847
Dollar/Yen 111.0900 111.0800 -0.02% +7.52% +111.1600 +111.0400
Euro/Yen
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