The dollar is up more than 5 percent from a record low of US$1.3666 per euro on Dec. 30 as the yield advantage, or spread, on US 10-year Treasury notes over German bunds of similar maturity widened to near the biggest since 2000. The gap on Friday was 88 basis points.
Investors are "placing less emphasis on payrolls figures at the moment and putting its attention on inflation and how the Fed might react," said Trevor Dinmore, vice president of foreign-exchange strategy at Deutsche Bank AG in London.
Goldman Sachs Group Inc and Merrill Lynch & Co raised their forecasts for Fed interest-rate increases because of concern inflation is accelerating, before Friday's reports were released.
Goldman, the world's third-biggest securities firm by capital, lifted its year-end forecast for the Fed's main rate to 4 percent, from 3.5 percent. Merrill, the biggest, raised its projection to 3.5 percent, from 3.25 percent.
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