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The dollar ekes out gains despite upbeat U.S. employment report

The dollar ekes out gains against the other major currencies on Friday, advanced with the release of strong U.S. employment data, while concerns over Chinese volatility continued to subside.
 
The U.S. Department of Labor said non-farm payrolls rose to seasonally adjusted 292.000 jobs in December, from 252.000 jobs in November whose figure was revised up from 211.000 gains. Analysts had expected U.S. employment data to rise 200.000 last month. Another reported showed that the U.S. unemployment rate remained consistent at 5.0% last month, in line with expectations.
 
As a result, expectations that the Federal Reserve could raise interest rates at a faster pace this year increased, boosting hopes that the dollar would become more attractive to yield-seeking investors.
 
However, worries over slowing growth in China, which have been exacerbated by the swift rate of the Chinese yuan’s decline, saw the greenback trim back gains in late trade.
 
On Thursday, China’s Securities Regulatory Commission suspended its Monday implemented circuit-breaker system, hours after the People's Bank of China set a higher yuan guidance rate for the first time in nine days, with the dollar to find support because of a plunge in yen price.
 
The dollar missed gains against the yen, with USD/JPY sliding to 117.43 late Friday, down from a high of 118.81 earlier in the day.
 
The single currency finished the week almost unchanged against the dollar, with EUR/USD at 1.0926, off an earlier low of 1.0803.
 
The dollar holds gains against the Swiss franc, with USD/CHF at 0.9947 late Friday, down from the day’s highs of 1.0050.
 
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 98.45, up just 0.16% for the day, off an earlier high of 99.3.
 
In the week ahead, with Wednesday’s trade data of China release, investors will continue to focus on economic reports of the country. On Thursday, monetary policy meeting minutes from the Bank of England will also be in focus. On Friday, the U.S. is to release data on retail sales, producer prices and consumer sentiment.


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