The dollar held at two-month highs versus the yen early on Thursday, having risen against some currencies on new data supporting the case for a hike in U.S. interest rates next month. The greenback fetched 124.835 yen JPY= after briefly popping above 125.000 for the first time since early June. It also hit a fresh six-year high on the New Zealand dollar, which skidded to $0.6490 NZD=D4.
Dollar bulls took heart after the Institute for Supply Management’s services sector index jumped to 60.3 last month, the highest reading since August 2005. The upbeat report helped offset a slowdown in U.S. private job growth and comments from Fed Governor Jerome Powell.
Powell said Fed policymakers have not yet decided whether to raise interest rates next month, in contrast to more hawkish comments from Atlanta Fed President Dennis Lockhart. “USD and U.S. yields seesawed on the mixed data, but emerged higher with the booming non-manufacturing ISM outweighing ADP private payrolls data,” noted Sean Callow, senior currency strategist at Westpac Bank.