Dollar edges up as oil prices bounce, payrolls eyed
SPY•The dollar index rose 0.04% to 101.51 as oil prices rebounded about 2% and investors awaited Friday’s payrolls report. Markets priced in a 74.5% chance of a Fed rate increase of at least 25 basis points in December.
1. Dollar and jobs data
The dollar index ticked up 0.04% to 101.51 on Thursday as oil prices recovered about 2% after falling more than 8% in the prior session. Weekly initial jobless claims fell by 6,000 to 189,000, matching a 57-year low, while investors awaited Friday’s government payrolls report.
2. Fed rate expectations
Markets priced in a 74.5% chance of a Fed rate increase of at least 25 basis points at its December meeting, down from 79.9% a week earlier. Cleveland Fed President Beth Hammack said more work was needed to bring inflation to the 2% target, while Richmond Fed President Tom Barkin said a gradual pace of increases made sense.
3. Sterling and yen
Sterling rose 0.04% to $1.3473 after the Bank of England raised rates for the first time in over three years and said at least one more increase was likely if the US-Iran conflict continued. The yen strengthened 0.28% to 157.95 per dollar after Bank of Japan minutes reinforced expectations for further rate increases.
