The dollar was perched near a two-month high on Monday after a blowout U.S. jobs report sent traders ramping up bets on a Federal Reserve rate hike this year, while the yen teetered further into the intervention zone, Reuters reported.
Moves in currencies were largely muted compared to the broader market, where a rout in technology stocks swept across Asia. The dollar held to its strong gains made in the wake of the report that showed nonfarm payrolls increased by 172,000 jobs last month, far exceeding estimates.
Against the dollar, the euro fell to a two-month low of $1.1507, while sterling struggled at a three-week trough of $1.33165.
The Australian and New Zealand dollars similarly slid to their lowest in two months at $0.7016 and $0.5779, respectively.
"The U.S. payrolls report ... paints a picture of a U.S. labour market that is strengthening despite the ongoing energy price shock," said Jonas Goltermann, chief markets economist at Capital Economics.
That combination makes policy tightening by the Fed later this year increasingly probable ... we now expect the FOMC to deliver two 25-basis-point rate hikes later this year, in response to the energy supply shock and the re-acceleration of the U.S. labour market."
Prior to the release of the jobs report, traders had been gradually adding to bets on a Fed hike this year, as the global energy crisis tied to the Iran war threatens to stoke inflation.
Israel said it struck military targets in western and central Iran on Monday, even after U.S. President Donald Trump reportedly told Israeli Prime Minister Benjamin Netanyahu to refrain from further attacks.
Markets are now pricing in a more than 70% chance that the Fed will raise rates in December, sharply up from a 45% probability a week ago, according to the CME FedWatch tool.
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