Written by Tom Westbrook
SINGAPORE (Reuters) – The dollar looked set to continue its longest streak of weekly gains in more than a year on Friday, supported by rising bond yields and expectations of another strong set of U.S. jobs numbers.
The dollar rose 0.5% against the yen this week to 158.03 yen, adding more than 1% to the struggling pound, which fell to its lowest level in 14 months in conjunction with a sell-off in government bonds and concerns about British financial conditions.
The dollar is heading for a broadly stable week against the euro, which bought $1.0926 and achieved slight gains against the Australian and New Zealand dollars. (Australian dollar/)
The index is poised for a sixth straight weekly gain, its longest stretch since 11 weeks in 2023, as the US economy continues to look strong in contrast to weaknesses elsewhere.
The index settled in the Asian morning on Friday, with a weekly rise of 0.25% to 109.18.
“We suspect the dollar needs to give back much of its recent gains,” said Chris Turner, head of global markets at ING, pointing to a shake-up in long sterling positions and risks to the dollar's upside from US jobs data due later. From this year. day.
“Despite profit-taking risks, the (dollar index) found good support below 108 earlier this week.”
The pound sterling fell in the latest trading by a small fraction at $1.2295, after touching a 14-month low at $1.2239 earlier in the week. The Australian and New Zealand dollars are sitting near multi-year lows, with the latter at US$0.6190 – about to break the 2022 low of US$0.6170.
The New Zealand dollar is also testing its lowest level since 2022 at $0.5512 and was last at $0.5594.
Payroll
US non-farm payrolls data is expected to show 150,000 jobs added in December, with the unemployment rate holding steady at 4.2%.
Hinting at anything stronger would add to the case for lower Fed rate cuts and could trigger another round of selling in jittery bond markets.
Philadelphia Federal Reserve Bank President Patrick Harker said overnight that he expected the US central bank to cut interest rates, but added that there was no need for an imminent move lower.
Markets have already lowered their expectations to around 40 basis points for 2025 US interest rate cuts, while concerns about President-elect Donald Trump's potential inflationary agenda have helped lift long-term yields.
Ten-year Treasury yields rose about 9 basis points this week to 4.68% and have risen 96 basis points since mid-September. (we/)
Ten-year government bond yields rose 22 basis points this week to 4.805%. (GB/)
Unusually, the turmoil in the bond market appears to have been felt in cryptocurrencies, with Bitcoin falling 5.7% against the dollar during the week to $92,600.
“I'm not sure how many people were aware of…the dynamics shaping up in US interest rates/Treasuries, and many would be wondering what the factors behind the move in cryptocurrencies are,” Pepperstone's head of research said. Chris Weston.
