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  • Writer's pictureanalysiswatch

Title: Dollar Edges Lower as U.S. Jobs Data Loom Large

Jan 07, 2022 02:53AM ET

By: AnalysisWatch

The US dollar edged lower in early European exchange on Friday yet remains extensively up in front of the arrival of the authority month-to-month US occupations report, which could reinforce the case for an early Fed rate climb.

At 2:55 AM ET (0755 GMT), the dollar record, which tracks the greenback against a bushel of six different monetary forms, was exchanging 0.1% lower at 96.227, however is on target to post week by week gains.

Although the dollar was marginally weaker on Friday, solidifying expectations that the US Federal Reserve could raise interest rates fairly soon this year, especially after the aggressive minutes from the Fed's December meeting, is driving US yields and the currency higher.

Fed funds futures have priced in about an 80% probability of a 25 basis point rate hike by the Fed's March meeting.

The USD/JPY rose 0.1% to 115.97, with the yen the clearest victim of the firmer dollar, hitting a five-year high of 116.35 earlier in the week as the Bank of Japan sees a rate hike as highly unlikely.

The GBP/USD pair rose 0.1% to 1.3540, while the riskier AUD/USD fell 0.1% to 0.7157.

The main focus of the day will be the release of the US labor market data, which is expected at 8:30 AM ET (1330 GMT). Payrolls are expected to have risen by 400,000 in December, almost doubling the disappointing 210,000 increase in November, with the unemployment rate expected to fall to 4.1% from 4.2%.

However, Wednesday's private labor market report, often used as an indicator of the government's report, showed that businesses added 807,000 jobs last month, more than twice as many as expected. Other data, such as wage growth, will also be examined for their impact on inflation.

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