The index is holding steady above its 50-day moving average of 106.812, confirming a strong intermediate uptrend. The 200-day moving average of 104.557 provides long-term support.
DXY rose 0.44% to 109.640, its highest since November 2022, and its sixth straight week of gains, the longest since 2023.
Strong payroll data fuels dollar momentum
The Labor Department announced that the number of employees in December increased by a significant 256,000, exceeding the expected 160,000. The number of employees in November was revised downward to 212,000, while the unemployment rate fell to 4.1%, lower than the expected 4.2%. Wage growth also supported the resilience of the labor market, with average hourly wages rising 0.3% in December, or 3.9% from the same month last year.
The jobs data effectively tempered expectations for aggressive rate cuts. Analysts at Rabobank said the Fed's policy could lead to just one rate cut in 2025, potentially delaying further monetary easing.
Inflation expectations rise, dollar strengthens
Consumer sentiment data from the University of Michigan shows inflation expectations one year out have risen sharply, rising to 3.3% in January from 2.8% in December. This is the highest level since May and puts the 12-month outlook above pre-pandemic norms.
