The U.S. dollar or the greenback as many people call it strengthened its positions against major currencies on Friday as traders positioned ahead of key U.S. jobs data that could clear the path for an earlier rake hike by the Federal Reserve. Money markets see high odds of the central bank raising the target rate by a quarter-point at its June meeting.
According to economists, the U.S. created more than 500,000 new jobs last month.
On Thursday, Fed officials joined Chair Jerome Powell in striking a hawkish position. San Francisco’s Fed President Mary Daly made an interesting comment. Fed President’s stated that it may be the time to “start crafting a plan” to raise rates to tackle inflation. Richmond’s Fed President Thomas Barkin also agrees with Mary Daly.
One day earlier, Jerome Powell reiterated in testimony to Congress that the Fed will consider swifter action at their next meeting.
We should not forget about Covid’s new variant. The continued spread of the omicron variant globally helped to boost safe-havens like the U.S. dollar and yen.
Dollar and other currencies
The dollar index, which measures the U.S currency against six major peers, gained 0.2% to 96.283. The dollar index is on track for its sixth consecutive weekly gain, the longest stretch since January 2015
The U.S. currency advanced 0.2% to 113.40 versus the Japanese yen.
Also, the euro dropped 0.1% to $1.1291, consolidating after its drop to an almost 17-month low at $1.1186 last week.
The Australian dollar fell 0.5% to a new 13-month low of $0.7055. The Aussie declined for a fourth consecutive session.
The European Central Bank as well as the Reserve Bank of Australia are not willing to change their positions. The Reserve Bank of Australia will announce its decision on Tuesday.
The British pound dropped 0.2% to $1.3271.
