Dollar retains strength ahead of payrolls; sterling slips again
The US dollar edged higher Friday, holding on to recent gains ahead of the release of the highly influential monthly jobs report, while sterling continued to retreat.
At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 109.040, on course for a weekly gain of 0.3%.
This would be its sixth consecutive weekly gain, its longest run since an 11-week streak in 2023.
The dollar traded near its strongest levels since November 2022, holding on to recent gains as the US returned from a holiday to honor former President Jimmy Carter.
The focus was squarely on nonfarm payrolls data for December, due later in the session, as traders look for more cues on the US economy and the future path of interest rates.
The minutes of the Fed’s December meeting, released on Wednesday, showed policy makers remain concerned over the potential for inflation to flare up again, especially given the likely impact of the expansionary and protectionist policies under President-elect Donald Trump.
US nonfarm payrolls data is expected to show the economy added 154,000 jobs in December on top of the 227,000 in November, with unemployment holding at 4.2%.
Anything stronger would add to the case for fewer Federal Reserve rate cuts in 2025, boosting the dollar.
In Europe, EUR/USD edged higher to 1.0303, helped by data showing that French industrial production rose 0.2% on the month in November, an improvement from the prior month’s drop of 0.3% and above the fall of 0.1% expected.
GBP/USD traded 0.2% lower to 1.2285, with sterling on course to lose 1% this week after earlier falling to a 14-month low following a selloff in UK government bonds amid concern about British finances.
USD/JPY dropped 0.1% to 157.85, with the Japanese currency helped by the release of stronger-than-expected household spending data earlier Friday.
This followed on from a bigger-than-expected increase in wage growth on Thursday, and has sparked increased speculation over a January interest rate hike by the Bank of Japan.
Source: Investing.com
