The US Dollar is poised for a weekly gain, supported by expectations that the Federal Reserve will likely hold off on interest rate cuts in December. This comes even after the release of a mixed US jobs report. The dollar has strengthened against all major currencies, showing particular strength against the yen, kiwi, and aussie.
- The dollar index is set to rise nearly 1% for the week.
- Expectations are growing that the Federal Reserve will not cut interest rates in December.
- The US jobs report was mixed, with employment growth accelerating but the unemployment rate rising to 4.4%.
- This is the final labor market data before the December FOMC meeting.
- The Fed is expected to maintain its current policy due to economic uncertainty and the government shutdown.
- Fed Governor Michael Barr indicated caution on further rate cuts due to inflation remaining above target.
- The dollar is strengthening against all major currencies.
The dollar’s resilience signals investor confidence in the US economy relative to other major economies. The perceived stability of current monetary policy, coupled with concerns over ongoing economic uncertainty, is driving demand for the dollar. This suggests that the dollar may maintain its strength in the short term, particularly if the Federal Reserve signals a continued pause in interest rate cuts.