He global dollar rose this Monday, taking its peers to multi-year lows, after the surprising jobs report in USA Friday underscored the economy’s strength and clouded prospects for further U.S. rate cuts. Federal Reserve (Fed) this year.
He dollar indexwhich measures the currency against a basket of six rival currencies, rose to its highest level in more than two years to hit a high of 110.17, extending the recent rally, Reuters reported.
Friday’s data showed that job growth in USA accelerated unexpectedly in December and the unemployment rate fell to 4.1%, prompting traders to sharply reduce their bets on rate cuts by the Federal Reserve this year.
On Wednesday the inflation in the United States, so any upward surprise could further close the door to future measures of flexibility.
“Looking back to last year there were concerns and signs that cracks were emerging in the labor market, but they appear to have been fully resolved, not just papered over,” said Dominic Bunning, head of currency strategy at the G10 in Nomura. “The US economy is resilient enough to justify a strong dollar and relatively higher rates,” he added.
Added to the expectations of a less aggressive flexibilization cycle is the opinion that the president-elect’s plans donald trump Imposing heavy tariffs on imports, tax cuts and restrictions on immigration could fuel inflation. The Republican will return to the White House in a week.
He euro reached its weakest level against the dollar since November 2022, at $1.0177, while sterling was one of the biggest losers, falling as much as 0.7% to a 14-month low of $1.21.
On the other hand, the Australian dollar plummeted to its lowest level since April 2020, at $0.6131. He new zealand dollar It last traded at $0.5544, near a more than two-year low.
Meanwhile, the yuan bucked the global trend and rose slightly on Monday after China will step up efforts to defend the weakened currency by relaxing rules to allow more foreign borrowing and issuing verbal warnings. He offshore yuan rose 0.1% to 7.3576 per dollar.
The measures of Monday People’s Bank of China They follow Friday’s suspension of Treasury bond purchases, which briefly raised yields and spurred speculation that it is stepping up the yuan’s defense.
The Chinese currency has come under pressure again partly due to investor disappointment over the lack of more stimulus from Beijing to shore up its ailing economy.
On the other hand, the dollar also rose in Japan 0.2% to 157.37 yen. The fall in the yen was mitigated by the news that the authorities of the Bank of Japan (BoJ) They could raise their inflation forecast at a policy meeting this month as a prelude to another rate hike.
Source: Ambito
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