U.S Dollar Propels High With Job Report On Spotlight

On Friday, the safe-haven currency was on track for a second straight week of gains against major peers ahead of important U.S. jobs report that could influence when the Federal Reserve raises interest rates.

After the Bank of England kept rates steady on Thursday, the sterling was headed for its worst week in 11 weeks.

After rallying 0.51% overnight, the dollar index remained at 94.327, measuring the greenback against six rival currencies. That gave it a week-to-date gain of about 200 basis points

In reaction to the anticipated US Nonfarm Payrolls for the month of October, the index remains sidelined and follows the range-bound theme that prevails in the rest of the global markets.

Following Thursday’s moderate losses, yields across the curve attempt to rise tepidly.

US economists expect the economy to have added 450K jobs during last month, while the unemployment rate is expected to go down to 4.7%.

Despite a 1.36% slump in the previous session, the pound was little changed on Friday, setting up a 1.39% loss for the week.

After some of the biggest global central banks snubbed bets for early rate hikes this week, investors were forced to reset monetary policy expectations.

Christine Lagarde, president of the European Central Bank, said on Wednesday market expectations for a rate hike in 2022 are unlikely.

Meanwhile, as the Federal Open Market Committee announced a $15 billion monthly taper of its $120 billion in monthly asset purchases on Wednesday, Fed Chair Jerome Powell said he was not in a hurry to hike borrowing rates.

Fed officials delivered a “dovish taper,” but the USD is still a better bet than most. Reports on payrolls this week will be at least as strong as consensus, meaning dips into the mid-93s will be a buying opportunity, they said.

Moreover, the US dollar should keep a close eye on the progress of the current inflationary environment, as well as Federal Reserve rate-setters’ outlook on whether it is likely that high prices will persist for some time to come, as well as the performance of economic recovery amidst unabated supply disruptions and the escalating COVID19 outbreaks.