Dollar index hovers near 11 1/2-year high ahead of NFP

The dollar index rose for a second straight session on Thursday to hit a an 11 1/2-year high, as investors expect Friday’s NFP report to show further progress in the U.S. labor market.

Although ADP employment and jobless claims report missed analysts’ forecasts, the NFP remains the main gauge to the health of the job market.

Analysts’ predict the non-farm payrolls data to signal the addition of 240,000 jobs in February from 257,000 jobs in January.

Still, the dollar is the favorite due to the divergence in monetary policy between the Federal Reserve and other major central banks.

While key central banks are still announcing new stimulus packages, the Fed is in talks about the timing of the first interest rate hike since 2006.

As known, the euro has the lion’s share in the six-currency gauge, the dollar index, which means the drop in the shared currency is giving more strength to the dollar.

The single currency fell after ECB President Mario Draghi said the bank may extend its bond purchases beyond September 2016, if required.

The ECB said it would start buying bonds on March 9, including debt with negative yields, where the purchases will amount to 60 billion euros each month.