London (awp/afp) – The dollar soared on Friday, driven by data showing a robust US job market and beating expectations, which could delay the rate cut schedule of the US Central Bank (Fed ).
Around 8:20 p.m. GMT, the dollar rose 0.61% against the euro, to $1.0238, after the single currency fell to its weakest level since November 2022 against the greenback, to $1.0215 .
It also climbed 0.85% against the pound, to $1.2204, after a new low for the British currency since November 2023, at $1.2193.
The Dollar index, which compares the American currency to a basket of other major currencies, reached a new high since November 2022 on Friday, at 109.966 points. Against the Australian currency, the greenback also climbed to its highest level since April 2020.
After catching its breath at the start of the session, the dollar benefited from the December report on American employment from the Department of Labor published on Friday.
In the last month of the year, 256,000 jobs were created in the United States, up compared to the previous month, well beyond the 165,000 jobs projected by the Bloomberg consensus. The unemployment rate also fell slightly in December, to 4.1%.
“Overall, the report is very favorable” and has “painted a picture (…) of very strong American growth”, summarized Brad Bechtel of Jefferies to AFP.
“The surprising strength of the US labor market means that traders have now postponed until October the next Fed rate cut on which they are fully betting,” noted Fawad Razaqzada, analyst at City Index.
Ahead of this publication, the market rather estimated that the Fed’s next interest rate cut could occur in May, with a 53% probability, noted Ipek Ozkardeskaya of Swissquote Bank.
At the end of the day, the “buck” – one of the nicknames of the United States currency – however “may have encountered some profit taking”, which caused it to “fall from its peaks” reached earlier, according to Mr. Bechtel.
“Without this, the dollar could have continued its course,” added the analyst.
At the same time, the pound sterling continued to sink on Friday, weighed down by concerns both about the ability of the British government to control the public debt and about the country’s economy, combined with threats to increase customs duties made by Donald Trump.
The borrowing rate on 30-year British bonds recorded on Thursday its highest since July 1998, at 5.47%, while yields on 10-year British government bonds were at their highest since July 2008, at 4 .92%.
On Friday, the British bond market was calmer, with the yield on 10-year notes hovering around 4.85%.
Cours de vendredi Cours de jeudi 20H20 GMT 22H00 GMT EUR/USD 1,0238 1,0300 EUR/JPY 161,64 162,64 EUR/CHF 0,9392 0,9394 EUR/GBP 0,8390 0,8368 USD/JPY 157,88 157,90 USD/CHF 0,9173 0,9121 GBP/USD 1,2204 1,2308
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