During today's Asian trading, the US dollar rose against major currencies, and reached its highest level since November 1, 2023, as momentum sparked by Donald Trump's election victory eclipsed a rise in bets for Fed easing.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.19% to 106.69. Since the beginning of the month, the index has jumped 2.6% after rising 3.18% in October. The rally in the US currency is driven by expectations that higher trade tariffs and tougher immigration under the new Trump administration will boost inflation, potentially slowing the Fed's monetary easing cycle in the long run. Meanwhile, expectations for deeper deficit spending are lifting Treasury yields, providing additional support to the US currency. Today, investors will focus on data on US producer prices and the weekly report on initial jobless claims. According to forecasts, in October producer prices rose by 0.2% after remaining unchanged in September, while initial jobless claims amounted to 223 thousand compared with 221 thousand a week earlier. The speech of Fed Chairman Jerome Powell, which will take place at 20:00 GMT, will also be important.
The Australian dollar fell 0.2% against the US dollar, hitting a three-month low amid Australian labor market data that will give the central bank breathing space to continue its focus on inflation and keep rates in restrictive territory until the end of the year. According to the report, in October the unemployment rate in Australia was 4.1%, confirming experts' forecasts and remaining unchanged compared to September. Meanwhile, the number of people employed rose by 15,900 after an increase of 61,300 in September (revised from 64,100). This was the 7th consecutive monthly increase, but the weakest in this sequence. Consensus estimates suggested employment growth of 25,000. Full-time employment increased by 9,700 to 10,037,700 people, while part-time employment increased by 6,200 to 4,499,800 people. The participation rate was 67.1%, shy of expectations for 67.2% - which would have been unchanged.