The US Dollar Index rose 0.4 percent to weekly highs just above 102.00 on Friday. The dollar outperformed its peers as risk aversion spread through markets after a tech-led selloff in global equities. Investors were also positioning ahead of the US Nonfarm Payrolls report due later in the day.
Tech selloff drives risk aversion
Global equity markets fell sharply, led by chipmakers. Traders blamed concerns that the Democrats’ victory in the US midterm elections would bring tougher AI regulation and delay new data centre plans. Stocks fell and demand for haven assets rose.
The dollar benefited from that shift.
Labour data and rate expectations
Labour data earlier in the week beat expectations. Wednesday’s ADP Employment Change and Thursday’s weekly Jobless Claims both came in stronger than forecast. ING said US short-dated rates had fallen by about 50 basis points since late September.
The consensus for October nonfarm payrolls is an increase of 65 thousand jobs, against 29 thousand previously. Unemployment stood at 4.2 percent at the last release, against a consensus of 4.1 percent. In our own measurement, the October unemployment rate was 4.1 percent, its lowest in 31 days.
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Data: FRED — St. Louis Fed
