The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against a basket of six major currencies, hit 109.98, its highest level since November 2022, during Asian trading hours on Monday. The greenback strengthened as strong US labor market data for December is likely to strengthen the US Federal Reserve’s (The Fed) stance to keep interest rates steady in January.
Additionally, Friday’s strong US jobs data led to a spike in US yields, with the 2-year and 10-year US Treasury yields standing at 4.38% and 4.76% respectively at the time of writing. Higher yields support the US Dollar.
Data from the US Bureau of Labor Statistics (BLS), released on Friday, reported that Nonfarm Payrolls (NFP) increased by 256K in December, significantly exceeding market expectations of 160K and surpassing November’s revised figure of 212K (previously reported at 227K). Additionally, the US Unemployment Rate edged down to 4.1% in December from 4.2% in November. However, annual wage inflation, as measured by the change in Average Hourly Earnings, fell slightly to 3.9% from 4% in the previous reading.
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The Fed Holds Rates, Dollar Index Continue Soars
