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Trends & Analysis
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US dollar spikes on upbeat NFP report

Monday, December 11, 2023

Today’s headlines

What’s happening: The US dollar moved higher on Friday following the release of the nonfarm payrolls (NFP) report for November.

What happened: Data released on Friday showed an acceleration in jobs growth in the US in November, signalling underlying strength in the country’s labour market.

The Japanese yen also fell against the greenback, after recording its biggest surge in almost a year in the previous trading session.

Why it matters: The Labor Department’s Bureau of Labor Statistics said non-farm payrolls rose by 199,000 in November, following a 150,000 gain in October. The figure was higher than market estimates of 180,000 job adds.

The unemployment rate eased to 3.7% in November, from 3.9% in the prior month. This was the level unemployment rate in the US since July. Average hourly earnings increased by 12 cents, or 0.4% month-over-month to $34.10 in November, above market estimates of a 0.3% rise.

The latest jobs reports spurred speculations of the US Federal Reserve not needing to begin cutting interest in the first quarter of next year.

The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained 0.43% to 103.98 on Friday.

The JPY/USD jumped as much as 1.2% in early trading on Friday, adding to its 2% rally on Thursday, following comments from Bank of Japan Governor Kazuo Ueda suggesting that the central bank was looking to end its policy of ultra-low rates. The forex pair fell later in the session on profit taking and strength in the US dollar.

The Chinese yuan also declined against the US dollar on Friday, despite data released on Thursday showing exports from China rising for the first time in six months in November.

The EUR/USD forex pair shed 0.31% to reach 1.0763, while the GBP/USD forex pair declined 0.37% to 1.2549 on Friday.

What to watch: Investors await the release of inflation data on Tuesday. The annual inflation rate in the US, which eased to 3.2% in October, is expected to slow further to 3.1% in November.

Data on consumer inflation expectations, due to be released on Monday, will also remain in focus. US consumer inflation expectations for the year ahead had eased to 3.6% in October but it projected to accelerate to 3.8% in November.

The markets today

European stocks will be in focus today after recording gains on Friday

Context: European shares climbed to their strongest level since February 2022 on Friday and ended the week in the green.

Details: Following the upbeat US jobs reports, there was growing speculations of central banks around the world being done with their rate hike moves and beginning to cut interest rates early next year.

Recent data from Germany showed inflation slowing in November, further increasing the prospects of the Eurozone’s interest rates having reached a peak. Germany’s consumer price inflation fell to 3.2% year-over-year in November, from October’s 3.8%. This marked the lowest reading since June 2021.

The STOXX Europe 600 Index gained 0.74% to close at 472.26 on Friday. The index added 1.3% for the week. Travel and leisure shares were among the top performers last week, gaining around 4.9%, while energy and miners were the worst performers.

The pan-European STOXX 600 index has surged 11% year to date, with Germany’s DAX 40 jumping 20% to a new record high.

Germany’s DAX 40 rose 0.78% to 16,759.22 on Friday, recording gains for the sixth consecutive week.

London’s FTSE 100 added 0.54% to close at 7,554.47, while France’s CAC 40 gained 1.32% to settle at 7,526.55.

What to watch: Investors await the release of interest rate decision from the European Central Bank on Thursday, with markets expecting the central bank to hold rates at 4.5% at the meeting.

Other Markets: US trading indices closed higher on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.36%, 0.41% and 0.39%, respectively.

The news shaping the markets

The US Senate rejected the White House’s bid to authorise $60 billion in emergency support for Ukraine. The news sent the RUB/USD forex pair higher this morning.


Japan’s business survey index of large manufacturing firms increased to 5.7% in the fourth quarter, from 5.4% in the prior quarter. However, data on large manufacturing firms in Japan seeing business conditions deteriorating in the upcoming months exerted pressure on the JPY/USD forex pair.


China’s consumer prices declined by 0.5% year-over-year in November, versus a 0.2% decline in the previous month, which sent the CNY/USD pair lower in forex trading this morning.


Greek industrial production growth accelerated to 10.5% year-over-year in October, from 1.9% in the prior month, lending support to the EUR/USD forex pair.


Taiwan’s imports fell 14.8% year-over-year to $27.67 billion in November, versus a 12.3% decline in October, which sent the TWD/USD pair lower in forex trading this morning.

What else to watch today

Japan’s machine tool orders, Saudi Arabia’s industrial production, Turkey’s industrial production, unemployment rate, current account and labour force participation rate, as well as Central Bank of Brazil’s focus market readout.


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