The dollar rose as traders awaited U.S. economic data

The U.S. dollar boosted on June 3 as traders awaited U.S. economic data. This data could set the tone at central bank meetings later in June.

Investors have bet on the greenback declining as the world rebounds from the COVID-19 pandemic. Still, they have lately become nervous over whether a strong U.S. economic rebound poses a threat to the theory that interest rates will remain low for a long time.

The mood has kept speculators from adding much to short positions in the last weeks and has put the brakes on what a month ago looked like a relentless downtrend.

The euro against the dollar traded 0.1% lower at 1.2196. Meanwhile, the greenback against the Japanese yen surged 0.2% to 109.77. The British sterling declined by 0.1% against the dollar, and trading at 1.4153, easing off a three-year high of 1.4250, reached Tuesday. The risk-sensitive Australian dollar dipped 0.2% to 0.7733.

The U.S. dollar index, which gauges the dollar against a basket of six currencies, rose to 90.112. It has found strong support at the 89.946 mark in recent sessions after dropping 2% in April and a further 1.6% in May.

The pace of the U.S. recovery picked up in the past two months

The Fed’s Beige Book, released Wednesday, showed that the pace of the U.S. recovery accelerated in the past two months. Notably, it issparking price pressures as businesses contended with worker scarcity and increasing costs. Notably, this follows consumer rates in April, accelerating at its fastest pace in more than 12 years.

Moreover, the dollar against the Chinese yuan surged 0.1% to 6.3893, with the yuan weakening as China’s services sector grew slower in May due to declining overseas demand and soaring input costs for businesses.

Sterling was the best-performing G10 currency against the dollar in May, with a 2.9% gain. Still, moves have been even more dramatic against the Japanese yen, since there are no expectations of Japan’s gigantic monetary support backing off.

Furthermore, the Japanese yen has been the biggest major loser against the greenback during 2021, falling about 6%.

The sterling is up 10% on the yen this year. The Canadian dollar, which has been further bolstered by rising oil prices, has increased by over 12% versus the yen.

Cryptocurrencies were little changed. The world’s largest cryptocurrency, Bitcoin, last traded at $38,700.