Forex

Dollar Moves Higher as Euro Slips Post-Rally

The dollar was higher on Monday despite data showed job growth in U.S. cooled down in December. It did little in altering prediction for Federal Reserve rate hikes this year.

Forex Charts and Graphs

The U.S. dollar index, which is used to measure the greenback against a basket of six major international currencies, was up 0.25 percent to 91.98. it rose from January 2nd’s 91.47, its lowest level since September 20 last year.

The dollar was up against the yen with USD/JPY at 113.33, rising 0.25 percent.

On the other hand, the euro dropped 0.25 percent with EUR/USD at 1.1999.

Sterling fell 0.26 percent against the firmer dollar with GBP/USD at 1.3538.

The Australian and New Zealand dollars both dropped. AUD/USD fell 0.41 percent to 0.7832 while NZD/USD dropped 0.15 percent to 0.7160. This was despite the Kiwi faring better than the Aussie during a late trade. The Australian dollar first dropped 0.22 percent at 0.7848 while the New Zealand dollar initially held steady at 0.7174.

Fed Rate Hikes

U.S. Labor Department reported on Friday that the economy was able to add 148,000 jobs in December. It was well below the expected 190,000. This caused the dollar to briefly slide down to its lowest level of the day.

The jobs data was not expected to change the insights of investors for a rate hike by the U.S. central bank during its March meeting. Fed officials declared three rate hikes this year and two in 2019 which are all not fully confirmed yet.

The U.S. currency suffered its biggest annual percentage decline since 2003 in 2017 as it dropped 9.8 percent.

Another cause for the drop was expectations for faster monetary tightening outside U.S. This was in hopes of lessening divergence between other central banks and the Fed.

San Francisco Fed President John Williams said that the Fed should raise interest rates three times in 2018 due to benefits the economy will get from the tax cuts.

The comments were made following Cleveland Fed President Loretta Mester’s statement. She said that her expectations were that rate hikes will rise four times this year. She cited solid U.S. economic growth and low unemployment as reasons.

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