The dollar index maintained its recent rise above 108.5 on Wednesday, bolstered by higher Treasury yields as robust US economic data reduced expectations for further interest rate cuts by the Federal Reserve.
Dollar strengthens on strong US data
Growth in the US services sector peaked in December, driving business activity and pushing prices to their highest levels since early 2023. Job openings also climbed by 259,000 to 8.098 million in November, surpassing expectations and reaching a six-month high. Investors are now paying attention to Friday’s monthly jobs report, one of the key data releases ahead of the Fed’s upcoming policy decision.
Markets price less than 50bps easing, dollar strengthens
Currently, markets are pricing less than 50 basis points of total easing this year. The dollar strengthened broadly, with the yen seeing the most significant decline.
