Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) – The U.S. dollar strengthened on Friday after data showed the world’s largest economy added more jobs than expected last month, reinforcing expectations that the Federal Reserve will pause its interest rate cut cycle at its meeting political at the end of the month.
The dollar rose to its highest level since July against the yen after the data and was last up 0.1% at 158.27 yen. The US currency has risen in five of the last six weeks.
Meanwhile, the euro fell to its lowest level against the dollar since November 2022. The euro zone’s common currency last fell 0.6% to $1.024, falling for the second week in a row.
As a Reuters poll showed, a significant number of currency forecasters expect the euro to reach parity with the dollar in 2025.
A Labor Department report showed that the U.S. economy added 256,000 jobs in December, well above economists’ forecasts of an enhance of 160,000. The November jobs figure was revised down to 212,000.
Meanwhile, the unemployment rate fell to 4.1% compared to expectations of 4.2%, while average hourly earnings rose 0.3% last month after rising 0.4% in November. In the 12 months ending in December, wages rose 3.9% after rising 4.0% in November.
“I think this will only encourage a continuation of the US dollar rally which has been the market sentiment for some time, certainly serves to reinforce the theme of US exceptionalism and should keep the Fed relatively hawkish compared to others in the G10 space,” Michael said Brown, senior research strategist at Pepperstone in London.
According to LSEG estimates, after the non-farm payrolls data, the US interest rate futures market fully priced in the break in the Fed’s monetary policy easing cycle at the January meeting. The market has also priced in just 31 basis points of rate easing in 2025 or just one rate cut, with the first rate change likely to come at the June meeting.
Elsewhere, sterling fell to its weakest level since November 2023 against the dollar and last changed hands at $1.2247, down 0.5%. It was also sold off on Thursday, in parallel with a sell-off in gold prices and concerns about the British government’s finances.
In Japan, prospects for sustained wage growth and a rise in import costs due to a frail yen have increased the central bank’s attention to rising inflation pressures, which could lead to an enhance in price forecasts this month, sources said.
Meanwhile, the gauge hit its highest level since November 2022 and was on track for a sixth straight weekly gain. That’s the longest stretch since an 11-week streak in 2023. The index was last up 0.2% at 109.48.
Currency
offer
prices per hour
10
January
02:44
afternoon GMT
Description RIC Last US Pct YTD Pct High Low
to Close Change offer Offer
Previous
Session
Dollar 109.39 109.2 0.17% 0.83% 109.97 109.
index 07
Euro/Dollar 1.0271 1.0299 -0.27% -0.78% 1.0312 $1.0
ar 212
Dollar/Ye 157.74 158.105 -0.19% 0.29% 158.86 157.
No. 645
Euro/Yen 162.06 162.85 -0.49% -0.71% 163.18 162.
05
Dollar/Sw 0.9149 0.9123 0.3% 0.83% 0.9189 0.91
it’s 3 p.m
Sterling sterling/ 1.2246 1.2307 -0.48% -2.08% $1.2323 $1.2
Dollar 194
Dollar/Katwa 1.4394 1.4392 0.02% 0.1% 1.4437 1.43
nadian 76
Australian/Up to 0.6167 0.6198 -0.46% -0.3% 0.6206 USD 0.6
139
Euro/Swiss 0.9396 0.9393 0.03% 0.03% 0.9419 0.93
86
Euro/Christmas 0.8384 0.8365 0.23% 1.34% 0.8393 0.83
ling 66
New Zealand 0.5567 0.56 -0.58% -0.51% $0.5603 0.55
Dollar/Up to 43
ll
Dollar/No 11.4159 11.3944 0.19% 0.44% 11.5117 11.3
road 921
Euro/Norway 11.7266 11.7186 0.07% -0.36% 11.791 11.7
is 174
Dollar/Sw 11.1842 11.1538 0.27% 1.52% 11.2547 11.1
Eden 36
Euro/Sweden 11.4879 11.4881 0% 0.18% 11.5053 11.4
in 75
