DXY Continues to Recover to Levels Above 110

The US dollar has continued its upward trend since the beginning of the new trading week, during the North American trading session, supported by recent developments in the financial markets last week, particularly regarding the policies of US President-elect Donald Trump and US employment data. The most prominent of these developments were the additional tariffs that the new president intends to impose on US imports, in addition to the sharp growth in US job growth.

The dollar index, which measures the performance of the US currency against a basket of major currencies, rose to 110.02 points, compared to the closing level recorded last Friday at 109.65 points. The index fell to its lowest level on the first trading day of the new week at 109.60 points, compared to the highest level of 110.18 points.

The US non-farm payrolls (NFP) increased by 256,000 jobs in December, compared to the previous month’s reading of 212,000 jobs, which was revised from the original reading of 227,000 jobs, according to data released by the US Bureau of Labor Statistics. At the same time, wage growth and unemployment saw a decline in December.

The actual reading for December exceeded market expectations, which indicated the possibility of an increase in US job growth of 166,000 jobs. The reading of the average hourly earnings index, the most reliable measure of US wage growth, also increased by 0.3% in December, which was lower than the previous reading, which increased by 0.4%. However, this decline was in line with market expectations, according to the monthly reading of the index.

The annual reading of the index increased by 3.9% last month, compared to the reading issued in the same month last year, which recorded a higher increase of 4.00%, which was below market expectations.

The US unemployment rate declined to 4.1% in December, compared to the previous reading of 4.2%, which was below market expectations.

The impact of this data was negative on the markets, as the sharp growth in US jobs led to speculation that the sharp improvement in US job growth was a shock to the markets due to its intensity and exceeding expectations by a large margin, which raised speculation about the possibility of the Fed halting interest rate cuts until the end of this year.