More Americans are employed and they are receiving higher wages, so consumer spending may be the next signal that dollar strength has more room to run.

The U.S. currency climbed the most in three weeks as a gain in monthly payrolls featured full-time jobs in the U.S. reaching a six-year high while hourly earnings advanced. July retail sales are forecast to have bounced back from a June decline, adding to evidence that may prompt the Federal Reserve to raise interest rates next month.

“With these numbers, we will start to see more of an advance because everyone is counting this as a validator for September,” Alfonso Esparza, a senior currency analyst at Oanda Corp. in Toronto, said by phone. “The next milestone becomes retail sales.” The report is scheduled for Aug. 13.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency versus 10 major peers, added 0.3 percent from a week earlier to 1,212.07 in New York. It touched a more-than-four-month high Friday after the jobs report.

The currency added 0.2 percent against the euro and 0.3 percent versus the yen, its biggest gain in three weeks. This year, the dollar is up 10 percent versus the euro and has added 3.7 percent against Japan’s currency.

Validating September

Policy makers are examining incoming data for signs the U.S. economy can withstand higher borrowing costs as they look to increase interest rates for the first time since 2006. That contrasts with officials at the European Central Bank and the Bank of Japan who are pushing on with monetary stimulus that tends to weaken their currencies.

There’s about a 54 percent chance the Fed will raise its benchmark in September, based on the assumption that the effective fed funds rate will average 0.375 percent after the increase, according to data compiled by Bloomberg.

The dollar is projected to rally to $1.06 per euro and 125 yen by the end of the year, according to the median estimate in Bloomberg surveys of analysts. Hedge funds and other money managers boosted net bullish bets on the dollar for a seventh week, the longest rising streak since March 2013, according to data from the Commodity Futures Trading Commission.

While the likelihood of a September Fed rate increase is greater, fed funds futures show a second move up in rates may not happen until June 2016 or later, limiting the scope for higher rates to add to the allure of dollar-denominated assets.

Economic Indicators

American employers added more than 200,000 workers for a third-straight month in July and unemployment remained at a seven-year low, Labor Department data showed Friday. Full-time jobs account for 81.7 percent of total employment, the highest level since November 2008.

Retail sales probably grew 0.6 percent in July, according to the median estimate of economists surveyed by Bloomberg News.

“It helps to maintain a long-U.S. dollar view, although we probably wouldn’t be looking to add to those positions just yet,” Bipan Rai, director of foreign-exchange strategy at Canadian Imperial Bank of Commerce’s CIBC World Markets unit, said by phone from Toronto. “I’m not sure how much more topside we have on the U.S. dollar unless the Fed is a lot more aggressive.”