The U.S. dollar is poised to extend its longest weekly winning streak in over a year, driven by rising bond yields and expectations of robust non-farm payroll data. The dollar index is on track for its sixth consecutive weekly gain, rising 0.25% to 109.18, reflecting confidence in the U.S. economy compared to weaknesses in other regions.
The dollar strengthened against the yen, gaining 0.5% to 158.03 yen this week, and surged over 1% against the British pound, which fell to a 14-month low of $1.2239 amid concerns over U.K. finances and a gilt market selloff. Sterling was last seen at $1.2295.
The greenback also made slight gains on the euro, steady at $1.0926, and remained strong against the Australian and New Zealand dollars, both near multi-year lows. The Aussie hovered around $0.6190, nearing its 2022 low of $0.6170, while the Kiwi tested its 2022 low of $0.5512, last trading at $0.5594.
Investors await U.S. jobs data, with analysts predicting 150,000 jobs added in December and unemployment steady at 4.2%. Stronger-than-expected data could bolster the dollar further by reducing expectations for Federal Reserve rate cuts. Currently, markets anticipate around 40 basis points of rate cuts for 2025.
Philadelphia Fed President Patrick Harker noted that while rate cuts are expected, an immediate reduction isn’t necessary. Rising Treasury yields underscore this sentiment, with 10-year yields climbing 9 basis points this week to 4.68%.
The volatility in bond markets has even impacted cryptocurrencies, with Bitcoin losing 5.7% this week to $92,600. Analysts suggest the crypto market may now be influenced by shifting U.S. Treasury dynamics.
The dollar’s momentum remains strong, with analysts like Chris Turner of ING emphasizing continued upside potential amid global economic uncertainty.


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