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Dollar follows bond yields up ahead of US jobs report

The dollar headed higher against the euro and the yen on Wednesday as private sector data pointed to a strong jobs report for June and sent Treasury yields jumping.

NEW YORK: The dollar headed higher against the euro and the yen on Wednesday as private sector data pointed to a strong jobs report for June and sent Treasury yields jumping.

Payrolls company ADP said the US private sector added 281,000 jobs in June, a better-than-expected surge from May's 179,000.

That boosted expectations for the official Labor Department jobs report -- to be released Thursday -- which if strong would add to expectations of official interest rate hikes taking place earlier next year than is now forecast.

"This morning's employment report should put to rest lingering concerns about the plunge in first quarter real GDP," said Deutsche Bank.

Treasury bond yields jumped on the ADP data, with the 10-year rising to 2.63 per cent from 2.56 per cent and the 30-year to 3.47 per cent from 3.39 per cent.

Nevertheless, the dollars gains were not great, with some economists saying the ADP numbers are not a solid indicator for the official data.

The dollar fell again on the pound, with the British currency hitting US$1.7176 before settling slightly below that.

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