Forex
Euro ticks up despite French government collapse; bitcoin breaks $100,000
By Ankur Banerjee and Harry Robertson
SINGAPORE/LONDON (Reuters) – The euro picked up on Thursday despite the collapse of the French government, which had been widely expected, while bitcoin galloped past $100,000 for the first time and the yen rallied as traders looked to the Bank of Japan decision on Dec. 19.
, the world’s best known cryptocurrency, has been on a tear since November on expectations that Donald Trump’s U.S. election win will usher in a friendly regulatory environment for cryptocurrencies.
It rose to an all-time high of $103,619 in Asian hours, boosted by President-elect Trump’s nomination of pro-crypto Paul Atkins to run the U.S. Securities and Exchange Commission. It was last fetching $103,100, up about 5% on the day and taking its year-to-date gains to more than 140%.
“There’s reason to believe this thing could keep going,” said Kyle Rodda, senior financial market analyst at Capital.Com, stressing the friendlier regulatory environment.
The euro was up 0.23% at $1.0533, not far from the two-year low of $1.0332 hit at the end of November as traders braced for a drawn-out reckoning for France.
French lawmakers passed a no-confidence vote against the government on Wednesday evening, throwing the country deeper into a crisis that threatens its ability to tame a massive budget deficit. The risk premium – or spread – investors demand to hold French debt over German has risen to around its highest since 2012.
The euro rose despite the uncertainty because the collapse of the government was already priced in, said Lee Hardman, senior currency analyst at MUFG.
“The contagion outside of French markets is fairly limited. If you look at the spreads between (German and) Italian and Spanish bonds they’ve actually been falling, so it’s not spilling over into European markets and that limits the implications for the European economy,” he said.
Traders are all but certain the European Central Bank will cut rates next week and are pricing in around 157 basis points of easing by the end of 2025.
YEN GAINS GROUND
In Asia, the Japanese yen rose as high as 149.66 but was last up 0.13% at 150.44 as traders assessed whether the Bank of Japan will hike interest rates later this month.
Analysts said comments from typically dovish policymaker Toyoaki Nakamura that he’s not opposed to rate hikes had helped push the currency higher.
Expectations had been growing that the BOJ will hike rates at its Dec. 18-19 meeting, buoyed by comments from Governor Kazuo Ueda. But media reports published on Wednesday suggested the BOJ may skip a rate hike this month, muddling those wagers.
The South Korean won dipped slightly as the nation’s finance ministry said the government would activate 40 trillion won ($28.35 billion) worth of market stabilization funds after the chaos that followed President Yoon Suk Yeol declaring martial law on Tuesday and then rescinding this.
The , which measures the U.S. currency against six rivals, was slightly lower at 106.18.
Sterling ticked up 0.17% to $1.2724, while the Australian dollar was flat at $0.6431 after dropping about 0.9% in the previous session on weak data.
Federal Reserve Chair Jerome Powell said on Wednesday the U.S. economy is stronger now than the central bank had expected when it started cutting rates in September, and he appeared to signal his support for a slower pace of reductions ahead.
Bets on Fed rate cuts held broadly steady, however, perhaps influenced by weaker-than-expected services sector data released on Wednesday. Markets are pricing in about a 74% chance of a 25-basis-point rate cut later this month.
The spotlight will be on Friday’s U.S. non-farm payrolls report for November, which is expected to show 200,000 jobs added in the month, according to a Reuters survey, after only 12,000 jobs were created in October, the lowest number since December 2020.
Investing.com – The US dollar edged higher Friday, holding on to recent gains ahead of the release of the highly influential monthly jobs report, while sterling continued to retreat.
At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 109.040, on course for a weekly gain of 0.3%.
This would be its sixth consecutive weekly gain, its longest run since an 11-week streak in 2023.
Dollar retains strength ahead of payrolls
The dollar traded near its strongest levels since November 2022, holding on to recent gains as the US returned from a holiday to honor former President Jimmy Carter.
The focus was squarely on data for December, due later in the session, as traders look for more cues on the US economy and the future path of interest rates.
The of the Fed’s December meeting, released on Wednesday, showed policy makers remain concerned over the potential for inflation to flare up again, especially given the likely impact of the expansionary and protectionist policies under President-elect Donald Trump.
US nonfarm payrolls data is expected to show the economy added 154,000 jobs in December on top of the 227,000 in November, with holding at 4.2%.
Anything stronger would add to the case for fewer Federal Reserve rate cuts in 2025, boosting the dollar.
“We think the balance of risks is tilted to the upside for the dollar today, as robust jobs figures could prompt markets to price out a March cut and potentially push the first fully-priced move beyond June,” said analysts at ING, in a note.
“We would still argue that with inflation concerns back on the rise – although the Fedspeak has been quite heterogeneous on that topic – next Wednesday’s CPI report could have deeper market ramifications.”
Sterling set for hefty weekly loss
In Europe, edged higher to 1.0303, helped by data showing that rose 0.2% on the month in November, an improvement from the prior month’s drop of 0.3% and above the fall of 0.1% expected.
That said, the euro remains weak, with the European Central Bank widely expected to ease interest rates by around 100 basis points in 2025, around double the cuts expected by the US central bank, with the regional economy still very weak.
“Markets are pricing a good deal of negatives into the euro at this stage, and perhaps the euro may be penalised less than other G10 currencies should US payrolls come in strong today,” ING added.
traded 0.2% lower to 1.2285, with sterling on course to lose 1% this week after earlier falling to a 14-month low following a selloff in UK government bonds amid concern about British finances.
“We expect higher yields to act as an additional headwind to growth via household remortgaging and weaker investment,” said analysts at Goldman Sachs, in a note.
“The rise in gilt yields reinforces our view that UK growth will disappoint in 2025, with our 0.9% real GDP growth forecast notably below consensus (1.4%), the BoE (1.5%) and the OBR (2%).”
Yuan lacks support
In Asia, rose 0.3% to 7.3513, with the Chinese currency seeing continued weakness after soft inflation data for December, released earlier in the week.
The prospect of trade tariffs under Trump also soured sentiment towards China.
dropped 0.1% to 157.85, with the Japanese currency helped by the release of stronger-than-expected data earlier Friday.
This followed on from a bigger-than-expected increase in wage growth on Thursday, and has sparked increased speculation over a January interest rate hike by the Bank of Japan.
By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) -The U.S. dollar rallied across the board on Friday after data showed the world’s largest economy created more jobs than expected last month, reinforcing expectations that the Federal Reserve will pause its rate-cutting cycle at its policy meeting later this month.
The dollar rose to its highest since July against the yen after the data and was last up 0.1% at 158.27 yen. The U.S. currency has risen in five of the last six weeks.
The euro, on the other hand, dropped to its lowest since November 2022 versus the greenback. The single euro zone currency was last down 0.6% at $1.024, falling for a second straight week.
A significant number of foreign exchange forecasters expect the euro to reach parity with the dollar in 2025, a Reuters poll showed this week.
A Labor Department report showed the U.S. economy added 256,000 jobs in December, much higher than economists’ forecasts for an increase of 160,000. The November jobs number was revised downward to 212,000.
The unemployment rate, meanwhile, dipped to 4.1%, compared with expectations of a 4.2% reading, while average hourly earnings increased 0.3% last month after gaining 0.4% in November. In the 12 months through December, wages advanced 3.9% after rising 4.0% in November.
“I think this will only encourage a continuation of the U.S. dollar upside that has been the market’s bias for a while, certainly serves to reinforce the U.S. exceptionalism theme, and should keep the Fed relatively hawkish compared to peers in the G10 space,” said Michael Brown, senior research strategist, at Pepperstone in London.
Following the nonfarm payrolls number, the U.S. rate futures market has fully priced in a pause in the Fed’s easing cycle at the January meeting, according to LSEG estimates. The market has also priced in just 31 basis points of easing in 2025 or just one rate cut, with the first rate move likely at the June meeting.
In other currencies, sterling tumbled to its weakest level since November 2023 against the dollar, and last changed hands at $1.2247, down 0.5%. It was sold off as well on Thursday in tandem with a selloff in gilt and concern about British government finances.
In Japan, prospects of sustained wage gains and the boost to import costs from a weak yen have heightened attention within the central bank to rising inflationary pressures that may lead to an upgrade in its price forecast this month, sources said.
The , meanwhile, advanced to its highest since November 2022, and was on track for a sixth consecutive weekly gain. That’s its longest run since an 11-week streak in 2023. The index was last up 0.2% at 109.48.
Currency
bid
prices at
10
January
02:44
p.m. GMT
Descripti RIC Last U.S. Pct YTD Pct High Low
on Close Change Bid Bid
Previous
Session
Dollar 109.39 109.2 0.17% 0.83% 109.97 109.
index 07
Euro/Doll 1.0271 1.0299 -0.27% -0.78% $1.0312 $1.0
ar 212
Dollar/Ye 157.74 158.105 -0.19% 0.29% 158.86 157.
n 645
Euro/Yen 162.06 162.85 -0.49% -0.71% 163.18 162.
05
Dollar/Sw 0.9149 0.9123 0.3% 0.83% 0.9189 0.91
iss 15
Sterling/ 1.2246 1.2307 -0.48% -2.08% $1.2323 $1.2
Dollar 194
Dollar/Ca 1.4394 1.4392 0.02% 0.1% 1.4437 1.43
nadian 76
Aussie/Do 0.6167 0.6198 -0.46% -0.3% $0.6206 $0.6
llar 139
Euro/Swis 0.9396 0.9393 0.03% 0.03% 0.9419 0.93
s 86
Euro/Ster 0.8384 0.8365 0.23% 1.34% 0.8393 0.83
ling 66
NZ 0.5567 0.56 -0.58% -0.51% $0.5603 0.55
Dollar/Do 43
llar
Dollar/No 11.4159 11.3944 0.19% 0.44% 11.5117 11.3
rway 921
Euro/Norw 11.7266 11.7186 0.07% -0.36% 11.791 11.7
ay 174
Dollar/Sw 11.1842 11.1538 0.27% 1.52% 11.2547 11.1
eden 36
Euro/Swed 11.4879 11.4881 0% 0.18% 11.5053 11.4
en 75
Investing.com — The surged to multi-year highs on Friday, hitting a level that an expert said would mark the pricing in of the ‘Trump Trade,’ leaving little room for further upside and creating an opportunity to turn bearish on the greenback.
The jumped 0.5% to to 109.67, and had earlier hit 109.91 — its highest level since November 2022.
“Start selling the dollar if our DXY 110 target is breached. Slowing global growth and a relatively more hawkish Fed have been priced in. So is a Donald Trump presidency,” Chester Ntonifor, Foreign Exchange/Global Fixed Income Strategist at BCA Research, said in a note.
The firm argues that this level would have fully priced in the “Trump-trade” and would be initiated from significantly overvalued levels.
The call for a weaker dollar comes as the strategist believes that “the bout of strength in US inflation, especially relative to other markets, is in its last innings,” amid expectations for a U.S. slowdown.
While the latest jobs report for December signaled little sign of a slowdown, Ntonifor sees the risk of the U.S. economy slowing due to “tightening financial conditions in the US.”
Looking ahead, Ntonifor suggested that a potential scenario could unfold later this year where “equity markets correct, the US dollar declines, and bond yields fall.”
Forex2 years agoForex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex2 years ago
How is the Australian dollar doing today?
- Forex2 years ago
Unbiased review of Pocket Option broker
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Commodities2 years ago
Copper continues to fall in price on expectations of lower demand in China
- Forex2 years ago
The dollar is down again against major world currencies
