US Dollar suffers biggest jolt in six weeks after December nonfarm payrolls miss



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US Dollar suffers biggest jolt in six weeks after December nonfarm payrolls miss

On Friday, the American Dollar had tumbled against most major and emerging market currencies, as the US Dollar Index (DXY) measured against a basket of six major currencies on an average had tumbled 0.54 per cent to 95.70, witnessing the steepest intra-session percentage decline in more than one month and a half that followed December nonfarm payrolls miss.

In point of fact, in the day’s broad-based decline in greenback was almost entirely catalysed by the US Labor Department’s closely monitored employment report which had unveiled that the US economy had created 199,000 jobs last month, wildly missing an analysts’ estimate of 400,000 positions.

Still, US unemployment rate tumbled to a 22-month low of 3.9 per cent from a 4.2 per cent a month, suggesting a rapidly healing US labor market might be closing in on a maximum employment. However, the December nonfarm payroll miss had bolstered views that the US Federal Reserve would hike its benchmark borrowing cost on March this year, easing optimisms of an earlier rate hike as cited in the minutes from December 14-15 US Federal Reserve policy meet, eventually weighing on the American currency.

US Dollar posts largest intra-session drop in six weeks

Citing statistics, in the day’s post-market US trading hours, the bloc’s common currency euro shared among 19 eurozone member countries, gained 0.55 per cent to $1.1361 against its American peer, while British Pound hit a fresh two-month peak, rising 0.45 per cent to $1.3592.

Risk-sensitive Australian Dollar added 0.26 per cent to $0.7180, while Kiwis gained 0.36 per cent to $0.6773 against its American counterpart. Commodity-linked loonies like of Canadian Dollar jumped 0.74 per cent to $1.2634, while safe-haven Japanese yen added 0.21 per cent to 115.58 yen per Dollar.

In tandem, another safe-haven asset Swiss Franc, rose 0.30 per cent to $0.9183. Despite Friday’s broad-based decline that marked off the US Dollar Index’s (DXY) biggest intra-session decline since November 26, when an emergence of Omicron variant had sent shockwaves across global money markets, the US Dollar Index had reported a marginal weekly gain, its first in three weeks.