Dollar Continues to Rise Against Other Majors

Dollar Continues to Rise Against Other Majors
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(January 08, 2018) The dollar pushed higher against other major currencies on Monday, as expectations for upcoming rate hikes by the Federal Reserve offset Friday’s downbeat U.S. employment data.

The greenback found support after San Francisco Fed President John Williams said on Saturday that the Fed should raise interest rates three times this year given that economy will benefit from tax cuts.

The comments came a day after Cleveland Fed President Loretta Mester said she expects about four interest rate hikes this year, thanks to solid U.S. economic growth and low unemployment.

The U.S. dollar had initially weakened after the U.S. Department of Labor reported on Friday that the economy added 148,000 jobs in December, disappointing expectations for an increase of 185,000. The unemployment rate remained unchanged at 4.1%, as expected.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.24% at 91.97 by 05:15 a.m. ET (09:15 GMT).

The euro and the pound remained lower, with EUR/USD down 0.29% at 1.1994 and with GBP/USD shedding 0.31% to 1.3531.

German Chancellor Angela Merkel of Germany entered talks with a rival party in a last-ditch effort to form a coalition government after months of political uncertainty in the euro zone’s largest economy.

In the UK, Prime Minister Theresa May said over the weekend there would be a cabinet reshuffle this week.

The yen and the Swiss franc were also weaker, with USD/JPY up 0.08% at 113.15 and with USD/CHF gaining 0.35% to 0.9780.

Elsewhere, the Australian dollar was lower, with AUD/USD down 0.33% at 0.7838, while NZD/USD held steady at 0.7168.

Meanwhile, USD/CAD was almost unchanged at 1.2414.

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