The us dollar rises ahead jobs report after Treasury yields jumped on Thursday and lifted the greenback across major currencies. The two-year note rose by more than 7 basis points. Meanwhile, the 10-year yield climbed nearly 6 basis points to 4.67%. Solid U.S. data drove the move, including initial jobless claims that beat expectations and strong productivity figures.
Traders focused on signs that the U.S. economy remains firm. As a result, they saw room for the Federal Reserve to stay patient on rate cuts. The source also said market expectations for a September rate hike stood at about 56%.
US Dollar Rises Ahead Jobs Report
The U.S. Labor Department will release the July employment report at 8:30 a.m. ET on Friday. The report is expected to show that the labor market remains resilient. Economists forecast a modest rebound in payroll growth after June’s weak gain. Meanwhile, the unemployment rate is expected to hold steady.
A stronger report could add to Thursday’s rise in Treasury yields and the U.S. dollar. However, weaker hiring or softer wage growth could pull yields lower and weigh on the dollar. The source said stocks could also find relief in that case.
Dollar Gains Across Major Currencies
The dollar rose 0.45% against the Japanese yen and 0.68% versus the Swiss franc. It also gained 0.27% against the euro, 0.40% versus the Australian dollar, and 0.32% against the New Zealand dollar. Additionally, the greenback added 0.05% against the Canadian dollar, its smallest gain of the session.
The source said higher U.S. yields widened rate gaps and supported the dollar. Safe-haven demand also added support. At the same time, a rebound in WTI crude added pressure on yields. Oil settled up 3.60% at $77.93 after reports that Iran is considering restricting U.S. and Israeli vessels from using the Strait of Hormuz.
That development revived concern about global energy supplies. Consequently, markets also weighed the risk that higher oil prices could slow progress on inflation. Friday’s U.S. employment report now stands as the next key event for the dollar and yields.
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Source: InvestingLive
