Dollar Posts Best Week Since November, Loonie Strengthens
The US dollar weakened slightly on Friday (March 6th) despite a surge in oil prices after the February US jobs report showed a surprise decline in hiring. However, on a weekly basis, the Bloomberg Dollar Index posted its biggest rally since November 2024. Meanwhile, the Canadian dollar (loonie) strengthened, becoming the biggest gainer among developed-market currencies.
The Bloomberg Dollar Spot Index fell less than 0.1% on Friday, narrowing its weekly gain to around 1.34%. Data showed US employers unexpectedly cut jobs last month and the unemployment rate rose, raising fresh doubts about the resilience of the labor market.
In energy markets, Brent and WTI both broke through $90 per barrel after Qatar's energy minister warned that the crisis could force a halt to Gulf energy exports within weeks. A Wall Street Journal report also reported that Kuwait was cutting production at several fields—adding to signs of supply disruptions.
Meanwhile, the 10-year US Treasury yield fell slightly to 4.13%, its first decline in a week, following the disappointing jobs data. Marc Chandler, Chief Market Strategist at Bannockburn Global, believes the dollar's relatively "calm" reaction reflects the continued dominance of the war, as well as the perception that jobs data could be distorted by weather and strikes.
In the options market, traders appear very bullish on the dollar's short-term outlook. One-week risk reversals indicate expectations for the strongest dollar strengthening in more than three years.
Among major pairs, USD/CAD fell 0.8% to 1.3573, giving the loonie a second consecutive week of gains and the only G-10 currency to strengthen against the dollar so far in March. However, the market is not yet fully convinced this trend will continue.
EUR/USD has remained relatively stable at 1.1613, but the euro has fallen 1.7% since last Friday—its worst week since October 2024. Money markets are now pricing in a 100% chance the ECB will raise borrowing costs this year—a sharp reversal from the previous week when a cut was seen as more likely than a hike.
In Asia, USD/JPY rose 0.15% to 157.82, strengthening for the fourth day this week. Technically, the Three White Soldiers pattern on the weekly chart is said to be nearing confirmation, which is usually interpreted as a signal for a bullish trend continuation.
Source: Newsmaker.id
