Dollar rises against key currencies after U.S. employment report

Dollar Continues Winning Streak

NEW YORK – The dollar gained ground on Friday following a report indicating that U.S. job losses were not as steep as anticipated. Additionally, the Federal Reserve suggested it might hold interest rates steady later this month.

While financial markets were on edge, anticipating a Supreme Court ruling that could impact President Trump’s extensive tariffs, it appears that a decision isn’t forthcoming this Friday. Still, it might be issued as early as next week.

According to the Labor Department, the U.S. economy added 50,000 jobs in December, which fell short of the 60,000 figure expected by analysts.

The dollar index climbed 0.31% to 99.18, marking its second consecutive week of increases.

“I mean, the standard error for non-farm payrolls is around 20,000, so it’s likely the market won’t react too strongly to this,” noted Steve Englander, responsible for global G10 currency research at Standard Chartered.

Market expectations suggest a 95% chance that the Federal Reserve will maintain its current rates during the upcoming two-day meeting on January 27 and 28, a notable rise from 68% just a month prior, according to data from CME Group’s FedWatch tool.

Weak Yen

The yen slipped following news that Prime Minister Sanae Takaichi might call for a snap election for the House of Representatives in early February.

In Japan, reports revealed that household spending in November showed an unexpected increase compared to the same month last year, indicating a surge in spending just before the Bank of Japan raised interest rates to a 30-year peak in December.

The dollar reached a one-year high of 158.185 yen, up from the previous 158.11 yen, reflecting a 0.78% increase and continuing a two-week trend of growth.

In Europe, German exports unexpectedly declined in November when compared to shipments to EU nations and the U.S. That said, industrial production saw a rise contrary to expectations.

The euro fell 0.26% to $1.1628, marking a downward trend against the dollar for the second week.

Turning to China, the annual consumer price increase rate accelerated to its highest level in almost three years in December.

The dollar eased by 0.10% to 6.975 yuan against the offshore Chinese yuan.

Other currencies also faced pressures, with the British pound dropping 0.24% to $1.3403 and the Canadian dollar falling 0.24% to C$1.39. The dollar rose 0.34% against the Swiss franc to 0.802 francs, enjoying its second week of gains.