Dollar Rebounds on Strong Consumer Sentiment
The dollar index rebounded to around 106 on Friday, reversing recent declines, amid optimism surrounding the US economy.
The University of Michigan's Consumer Sentiment Index rose to 74.0 in December, surpassing forecasts and signaling stronger consumer confidence, which could boost USD through higher spending. Meanwhile, labor market data revealed 237K jobs added in November, exceeding expectations and October’s revised figure of 36K.
However, the jobless rate edged up to 4.2%, reinforcing market expectations of an 88% chance of a 25 basis point Fed rate cut this month. Despite these anticipated cuts, the dollar remains strong as investors view the US economy as more resilient than regions like Europe and Canada, where rate cuts are seen as more necessary. Robust job growth, rising consumer sentiment, and the Fed’s cautious stance on further cuts are supporting the dollar.
Source : Trading Economics
