Dollar remains near month peak after US labor market data

The US dollar settled near the highest level in about a month today, Friday, after US economic data highlighted a labor market that is still scarce with employment, which may keep the Federal Reserve (the US central bank) on the path of sharply raising interest rates.

According to “Reuters”, the data showed on Thursday that the number of Americans who filed new applications for unemployment benefits decreased to the lowest level in three months last week, while layoffs fell 43 percent in December.

A separate report also revealed that employment in the private sector increased by 235,000 jobs last month, far ahead of expectations, which indicated an increase of 150,000.

Against a basket of currencies, the dollar index jumped 0.9 percent to its highest level in almost a month at 105.27 overnight. It is also heading for weekly gains of more than 1.5 percent, the largest since September

“All the tales of job losses in the technology sector are yet to be reflected in the overall employment data, and that indicates that while there is weakness in some sectors … there is still strong demand for workers,” said Khun Goh, head of Asia research at ANZ from other parts of the economy.”

The dollar’s rise sent the pound sterling to a six-week low of $1.1873 overnight. And it recorded in the latest transactions, an increase of 0.12 percent, to $ 1.1922

Similarly, the euro fell 0.8 percent to its lowest level in more than three weeks at $1.0515 in the previous session, and was stable in the latest trading at $1.0519.

Against the Japanese yen, the dollar rose 0.6 percent, to its highest level in a week at 134.045 yen, and recorded in the latest transactions 133.44 yen.

Markets are now turning their attention to the non-farm payrolls report, due later on Friday. Economists polled by Reuters expected the US economy to add 200,000 jobs in December.

“We may see a bullish surprise,” Goh said. This will keep the Federal Reserve insisting on continuing to raise interest rates.”

Preliminary inflation figures for the month of December in the eurozone will also be announced on Friday, as expectations indicate an annual rate of 9.7 percent.

Data from Germany, France and Spain did indeed show a slowdown in inflation last month, suggesting that inflation in the euro zone may come in below expectations.

The Australian dollar rose 0.07 percent to $ 0.6757, after falling 1.3 percent in the previous session, and giving up most of the gains made earlier in the week, thanks to news that China has eased restrictions on coal imports from Australia.

The New Zealand dollar increased 0.02% to $0.6224, after falling 1% on Thursday, and is on track for a weekly loss of about 2%, the worst since September.