The dollar climbed against the yen and the Swiss franc on Monday as a few investors positioned for an expected strong U.S. jobs data reading on Tuesday, which may revive debate about when the Federal Reserve will scale back monetary stimulus.
The dollar had been under pressure since the U.S. debt crisis flared, with disruption from the 16-day government shutdown that ended last week leading markets to conclude the Fed will delay plans to trim its bond buying for several months.
But the near-term focus was on the September jobs report, which was delayed due to the shutdown. It is forecast to show 180,000 jobs were created last month while the jobless rate is expected to remain steady at 7.3 percent.
If the data exceeds expectations, then speculation over whether the Fed can taper this year is likely to return, injecting some volatility in the currency market.
"For now all eyes will turn to U.S. nonfarm payrolls data tomorrow with markets anticipating a print near the 180K level," said said Boris Schlossberg, managing director of FX Strategy at BK Asset Management in New York. "If the numbers are close to expectations the greenback could see a relief rebound as the week proceeds."
The dollar rose 0.5 percent against the yen to 98.16 yen, inching towards a near three-week high of 99.00 yen set last Thursday.
The dollar was 0.2 percent higher against the Swiss franc at 0.9036 francs.
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