The previous week's strong US job report bolstered the dollar against the major currencies over the week

The strong US data painted a brighter economic picture and raised hopes of a near-term hike in US interest rates. However, escalating violence in Iraq increased security fears in the US and limited the dollar's rally. The dollar began the week trading higher against the European single currency amid a broad rally generated by the surprisingly robust US jobs report for March. The improvement in the US jobs data is considered the key to the Fed to raise its funds rate from a 1958 low of one per cent, which would increase the allure of dollar-denominated assets for foreign investors. The dollar buying momentum was bolstered further after the release of ISM service sector data that painted a brighter economic picture. The Institute for Supply Management's (ISM) non-manufacturing index surged to 65.8 in March, the 12th straight month of expansion, from 60.8 in February and with market's anticipation of 61.5. Economic figures from the euro zone on the other hand weighed on the single currency.