US Dollar jumps after employment data

• Financial

On Thursday, the US Dollar Index (DXY) measured against a basket of six major currencies on an average, had jumped as much as 0.84 per cent following an upbeat ADP National Employment report, which in effect would likely to encourage the US Fed to stay on its ultra-hawkish rate-hike path even in the expense of a cataclysmic recession in the US economy as cited by the Fed Chair Powell after US Fed's December 13-14 policy meet.

If truth is to be spoken, in the day’s sharp upward spiral in greenback against a clutch of major and emerging market currencies came forth, as investors appeared to be gambling on a 50-bps (basis percentage point) rate-hike bet as early as by early-2023, as earlier in the session, US National ADP Employment report had revealed that the US private payrolls rose more-than-anticipated, handing out an excuse for the US Fed to further tightening up their monetary policy.

On top of that, US Dollar appears to be regaining its safe-haven bid after having been met with a sweeping downfall over the final quarter of 2022, as a strong US labour market with hourly wages rising at a breakneck pace, would eventually contribute to an escalation in inflation-surge, which in effect would prompt the US Fed to continue its rate-hike cycle.

US Fed Chair Jerome Powell alongside other Fed policymakers had vowed to a gradual, yet persistent, rate-hike path on their December 13-14 policy meet, Minutes from the meet released late on yesterday had unleashed, eventually signalling a restoration of safe-haven bid for the US Dollar.

US Dollar gathers momentum after riant job data

Citing statistics, in the day’s FX market wind-down, the US Dollar Index (DXY) measured against a basket of six major currencies on an average jumped 0.84 per cent to 105.07, while the bloc’s common currency euro shared among 19 member states was slumped by 0.74 per cent to $1.0526.

Apart from that, the Japanese Yen which has lost its safe-haven status following a barrage of political turmoil across the nation, tumbled 0.51 per cent to 133.27 yen per dollar against its American peer, while the safe-haven Swiss Franc faltered as much as 0.70 per cent to $0.9363.

Besides, Pound Sterling shrugged off 1.17 per cent to $1.1916 against the greenback, while the commodity-linked Canadian Dollar shed 0.71 per cent to $1.3575. In tandem, risk-sensitive loonies like of Aussies and Kiwis fell across the board, as the Australian Dollar wrapped up the session 1.22 per cent lower to $0.6755 against its American peer, while Kiwis took a tattering header of 0.83 per cent to $0.6232.