On the heels of a jobs report issued in December that failed to meet expectations, the U.S. dollar was valued lower in comparison to a conglomerate of major currencies on Friday. The index weakened after it was announced by the Labor Department that nonfarm payrolls increased by 199,000 last month, more than 50% short of the original estimate.
However, analysts found underlying data appeared more secure, with the unemployment rate only descending to 3.9% against original expectations that projected 4.1% whilst earnings increased by 0.6%.
“All those places that are very important for economic growth continue to grow so that is fantastic, so the top-line number is a miss, the underneath stuff all seems to be doing good, albeit not at the pace we would like to see it.” – JJ Kinahan, Chicago TD Ameritrade Chief Market Strategist
Furthermore, the report increased expectations that the Federal Reserve will increase interest rates at its meeting in March, with the rate of futures on federal funds implying a 90% hike chance up from Wednesday’s 80%. The index of the U.S. Dollar decreased nearly 0.3% at just over 96. Even with the weakness on Friday, the U.S. Dollar was on track to increase in value for the first time in 3 weeks.
The Euro, on the other hand, increased 0.3% to just over $1.13 as it extended beyond the dollar in the wake of a report on payrolls and demonstrated little reaction to information regarding December’s 5% inflation to the eurozone. Policymakers in this area stated that inflation is expected to slow down gradually this year and a rate hike will likely remain unnecessary.
Japanese Yen strengthened at a rate of 0.12% against the dollar at 115.71. This currency has suffered the majority of the damage in the wake of the greenback’s recent strengthening, with the dollar landing a 5-year high against the yen towards the beginning of the week.
Even as the Omicron variant spread and the growth of the construction sector of Great Britain slowed down, the Sterling was noted for its third straight gain in a consecutive week with the last trading figure up 0.24% at $1.356. Investors have become increasingly optimistic as the pandemic’s impact remains unlikely to inspire aggressive action on behalf of the central banks or cause general derailment of the global economy.
With respect to cryptocurrencies, Bitcoin fell just over 2.5% to a market figure of $41,999.75. Next, Ethereum decreased nearly 6% to a low of $3,216.44 for a third consecutive decline on the day after reaching its lowest level ever since the beginning of October 2021.