Dollar gains ahead of US jobs Reuters

by Tom Westbrook

SINGAPORE (Reuters) – The dollar looked poised to extend its longest weekly winning streak in more than a year on Friday, boosted by rising bond yields and expectations of another strong U.S. job numbers.

The dollar gained 0.5% against the yen to trade at 158.03 yen this week and gained more than 1% against the ailing British pound, which hit a 14-month low on gilts and fears over British finances.

The dollar was set for a broadly flat week against the euro, which traded at $1.0926 and saw small gains against the Australian and New Zealand dollars. (AUD/)

The U.S. economy is poised for its sixth consecutive weekly gain, the longest after an 11-week streak, in 2023 as the U.S. economy continues to look strong despite other weaknesses.

The index was steady at 109.18 on Friday morning in Asia for a 0.25% weekly gain.

“We doubt the dollar will have to retrace much of its recent gains,” said Chris Turner, global market manager at ING. day.

“Despite the risk of profit taking, (the dollar index) found good support earlier this week below 108.”

Sterling was a weak fraction at $1.2295, having touched a 14-month low of $1.2239 earlier in the week. The Australian and New Zealand dollars have been stuck at multi-year lows, with the latter – $0.6190 – coming within a whisker of breaking the 2022 low of $0.6170.

The New Zealand dollar is testing the 2022 low of $0.5512 and ended at $0.5594.

Salary

US non-farm payrolls data showed that 150,000 jobs were added in December and the unemployment rate is expected to hold at 4.2%.

A hint of something stronger could add to the case for smaller Federal Reserve rate cuts and trigger another round of selloffs in jittery bond markets.

Overnight, Philadelphia Fed President Patrick Harker said he expected the U.S. central bank to cut interest rates, but said there was no need to go lower anytime soon.

Markets have cut expectations for a 2025 U.S. rate cut by nearly 40 basis points, while fears of a possible rate hike by President-elect Donald Trump have helped boost long-term yields.

Ten-year Treasury yields rose nearly 9 basis points this week to 4.68% and are up 96 bps since mid-September. (USA/)

The ten-year gilt yield rose 22 bps this week to 4.805%. (GB/)

Unusually, prices in the bond market seem to have been felt by cryptocurrencies, with bitcoin down 5.7 percent to $92,600 on the dollar on the week.

“I’m not sure how many people in the crypto scene are aware of … the dynamic changes in US rates / Treasuries, and many will question the reasons behind the movement in crypto,” said the head of Pepperstone Research. Chris Weston.