2021.10.0607:20:00UTC+00U.S. Dollar Advances As Treasury Yields Rally On Inflation Fears

The U.S. dollar firmed against its major counterparts in the Asian session on Wednesday, as treasury yields rose amid inflation worries following rising costs for crude oil and natural gas.

Oil prices climbed on supply worries amid indications of tightness in markets due to a global energy crunch.

Investors fear that rising energy prices could derail the global economic recovery from the pandemic.

All eyes are on U.S. jobs data due later this week, which is expected to show a continued improvement in the labor market.

Economists forecast a rise of 488,000 jobs in the month of September, while the jobless rate is seen falling to 5.1 percent from 5.2 percent.

The nonfarm payrolls data is seen as crucial in influencing the timing of the start of winding down the QE program.

The greenback climbed to a 5-day high of 1.1576 against the euro and a 2-day high of 0.9301 against the franc, off its early lows of 1.1601 and 0.9276, respectively. The greenback is seen finding resistance around 1.14 against the euro and 0.95 against the franc.

The greenback touched a 6-day high of 111.78 against the yen and a 5-day high of 0.6918 against the kiwi, after falling to 111.41 and a 2-day low of 0.6980, respectively. The next possible resistance for the greenback is seen around 113.00 against the yen and 0.66 against the kiwi.

The greenback rebounded from its prior lows of 0.7293 against the aussie and 1.2573 against the loonie and rose to 0.7253 and 1.2614, respectively in early trades. The greenback is likely to face resistance around 0.70 against the aussie and 1.285 against the loonie.

The U.S. currency climbed to 1.3597 against the pound, from a low of 1.3632 seen at 5 pm ET. If the greenback rises further, it may find resistance around the 1.34 level.

Looking ahead, U.K. construction PMI for September and Eurozone retail sales for August are due in the European session.

At 8:15 am ET, ADP private payrolls data for September is set for release.