Written by Tom Westbrook
SINGAPORE (Reuters) – The dollar was on track to extend its longest weekly winning streak in more than a year on Friday, buoyed by rising bond yields and hopes that U.S. jobs data will be strong again.
The dollar rose 0.5% against the yen this week to buy 158.03 yen, adding more than 1% to the slump in the British pound, which has fallen to a 14-month low in tandem with a fall in the pound and concerns about the UK's finances. Ta.
The dollar had a generally solid week against the euro, buying $1.0926, and also posted modest gains against the Australian and New Zealand dollars. [AUD/]
The dollar index rose for the sixth straight week, its longest streak since 11 straight weeks in 2023, as the U.S. economy continues to look strong in contrast to weakness elsewhere.
The index was steady in Asia Friday morning, rising 0.25% on the week to 109.18.
“I don't see the dollar needing to give back much of its recent gains,” said Chris Turner, head of global markets at ING, adding that long positions in the pound could be unwound and the U.S. jobs report due at the end of the year. He pointed out the upside risk to the dollar. day.
“Despite the risk of profit taking, (the dollar index) found good support below $108 earlier this week.”
The pound hit a 14-month low of $1.2239 earlier this week, but last fell slightly to $1.2295. The Australian and New Zealand dollars are hovering near multi-year lows, with the Australian dollar recently at $0.6190, just shy of breaking through to its 2022 low of $0.6170.
The New Zealand dollar also tested a 2022 low of $0.5512 and was last at $0.5594.
Payroll calculation
The US non-farm employment report is expected to add 150,000 jobs in December, with the unemployment rate remaining at 4.2%.
Any hint of a stronger move could further strengthen the case for tapering the Federal Reserve's interest rate cuts and trigger another round of selling in volatile bond markets.
Philadelphia Fed President Patrick Harker said last night that he expected the U.S. central bank to cut interest rates, but added that there was no need for an immediate rate cut.
Markets have already reduced expectations for a 2025 U.S. interest rate cut to about 40 basis points, while concerns about President-elect Donald Trump's potential inflationary policies are pushing longer-term yields higher.
The 10-year Treasury yield rose nearly 9 basis points this week to 4.68%, and has risen 96 basis points since mid-September. [US/]
The 10-year gold yield rose 22 basis points this week to 4.805%. [GB/]
Unusually, the bond market turmoil seems to have been felt by cryptocurrencies as well, with Bitcoin falling 5.7% against the dollar over the week to $92,600.
