News: FOREX-Dollar riding high on hike bets ahead of payrolls report

The dollar is set to notch up a fifth consecutive weekly gain on the Japanese yen and looks poised to extend the rally if U.S. labour data due later on Friday reinforces the case for early Federal Reserve interest rate hikes.
The greenback hit a five-year peak on the yen at 116.35 on Tuesday but has fallen back somewhat to trade at 115.93 yen JPY=EBS in Asia on Friday.
It is up about 0.7% on the yen this week and about 2.7% over five weeks. The gains have tracked firming expectations that the Fed could raise rates as soon as March and several times this year - driving a bond market selloff and a rise in yields.
The yen has been the most prominent loser among major currencies, as traders reckon the Bank of Japan is likely to lag global interest rate hikes, but the move in yields has also helped the dollar broadly.
It is eyeing its best week in more than a month against the Australian and New Zealand dollars.
The Aussie AUD=D3 fell through support around $0.7184 on Thursday and last bought $0.7171. It has lost 1.3% for the week so far. The kiwi NZD=D3 was near a two-week low at $0.6747 on Friday and down 1.4% for the first trading week of 2022.
The greenback is also up about 0.7% for the week to $1.1293 per euro EUR=EBS . It surged to a six-week high on the offshore yuan at 6.3975 on Thursday CNH=D3 and stands at a 17-month high on the South Korean won KRW=KFTC .
Overnight St. Louis Fed President James Bullard said the Fed could also start reducing its balance sheet soon after it begins hiking, and even dovish San Francisco Fed President Mary Daly said the balance sheet reduction would follow normalising rates.
Partial labour data on Wednesday beat market expectations by miles and a strong non-farm payrolls figure later on Friday, especially if it is bigger than the forecast 400,000 jobs added last month, could bolster the case for sooner hikes.
"If it is a very strong number the Fed has more fuel to maintain the hawkish rhetoric, which further supports the March hike probability," analysts at NatWest said in a note to clients, adding the downside is probably limited.
Elsewhere sterling GBP=D3 has held its own this week as traders figure the Bank of England will also soon to begin its own hiking path. It last bought $1.3533, not far from Tuesday's two-month high of $1.3599.
Rising Omicron cases are also causing jitters and in emerging markets the Thai baht THB=TH fell 1% against the dollar on Thursday after the country raised its virus alert level, foreshadowing tighter restrictions.
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	Currency bid prices at 0102 GMT 
 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS	$1.1299		$1.1300	 -0.01%		 -0.62%	  +1.1299	 +1.1290 
 Dollar/Yen		JPY=EBS	115.9400	   115.8500	+0.09%		 +0.82%	  +116.0400   +115.8900 
 Euro/Yen		 																			 
 Dollar/Swiss	  CHF=EBS	0.9213		 0.9213	  +0.07%		 +1.07%	  +0.9217	 +0.9216 
 Sterling/Dollar   GBP=D3	 1.3538		 1.3536	  +0.03%		 +0.12%	  +1.3540	 +1.3528 
 Dollar/Canadian   CAD=D3	 1.2710		 1.2727	  -0.12%		 +0.54%	  +1.2730	 +1.2712 
 Aussie/Dollar	 AUD=D3	 0.7171		 0.7163	  +0.12%		 -1.34%	  +0.7172	 +0.7158 
 NZ				NZD=D3	 0.6745		 0.6747	  -0.10%		 -1.52%	  +0.6747	 +0.6740 
 Dollar/Dollar																				   
All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX
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World FX rates	https://tmsnrt.rs/2RBWI5E 
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