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Author Topic: New York Money Market Conditions: Dollar strengthens after strong US employment  (Read 92 times)

Vulpisk

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New York Money Market Conditions: Dollar strengthens after strong US employment data.

The U.S. dollar strengthened against major currencies in trading on the New York Forex Exchange on Friday (Dec. 8 ) after the United States released data on higher-than-expected employment gains in November. while the unemployment rate decreased

The dollar index, which measures the dollar's movement against six major currencies, rose 0.45% to 104.0105.

The US dollar rose to 144.9790 yen on Friday (Dec 8 ) from 143.4850 yen on Thursday (7 Dec). The US dollar rose to 0.8804 Swiss franc from 0.8745 yen. The Swiss ranc and dollar rose to 10.4714 Swedish krona from 10.3816 Swedish kronor, but the US dollar weakened to 1.3584 Canadian dollars from 1.3595 Canadian dollars.

The euro weakened to $1.0758 on Friday from $1.0798 on Thursday. and the pound weakened to 1.2549 US dollars from 1.2591 US dollars.

The dollar strengthened after the US Labor Department said on Friday (Dec. 8 ) that nonfarm payrolls increased by 199,000 jobs in November. This was higher than analysts' expectations of 180,000 jobs and up from 150,000 jobs in October. The unemployment rate dropped to 3.7%, lower than analysts' expectations of 3.9%.

The dollar also gained support from the release of a survey from the University of Michigan indicating that The U.S. Consumer Confidence Index jumped to 69.4 in December, the highest level since August. And it was the first increase in five months. The confidence index was higher than analysts' expectations at 62.0 from 61.3 in November, which was the lowest level in six months.

Analysts say Such strong economic data led the market to lower expectations for a rate cut. which has helped support the dollar and US government bond yields

Yields on 2-year, 5-year and 10-year US Treasuries rose to 4.72%, 4.24% and 4.23% respectively.

However, the employment data did not change the forecast. The Federal Reserve's (Fed) interest rate raising cycle has ended. CME Group's FedWatch Tool expects the Fed to hold interest rates at its December meeting (12-13 Dec.), but will adjust. Lower interest rates next year

As for the Eurozone side Germany's November Consumer Price Index (CPI) rose 3.2% year-on-year but fell 0.4% month-on-month.



 

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