US Dollar mixed as jobs report backs December rate cut

The US Dollar (USD) was mixed on Friday after data showed the unemployment rate in the world’s largest economy edged higher in November, while gains in nonfarm payrolls were generally in line with expectations, keeping the Federal Reserve on track to cut interest rates later this month.

Nonfarm payrolls expanded by 227,000 jobs last month after rising an upwardly revised 36,000 in October, from 12,000.

Economists polled by Reuters had forecast payrolls accelerating by 200,000 jobs last month. Estimates ranged from 155,000 to 275,000 jobs.

Bloomberg had forecasts of 225,000 jobs and some analysts cited that number to conclude that payrolls barely beat expectations, suggesting the Fed is not likely to pause in its easing cycle.

The unemployment rate, however, inched higher to 4.2% as well, after holding at 4.1% for two straight months, data showed.

“The jobs number is not particularly outrageously strong,” said Paul Christopher, head of global investment strategy, at Wells Fargo Investment Institute, in St. Louis, Missouri. “It’s more in line with averages. It probably cements the Fed with another quarter point cut in December.”

In mid-morning trading, the dollar fell below 150 yen after the data and was last down 0.3% at 149.66 . The euro, on the other hand, climbed to a three-week peak following the report. It last traded slightly down at $1.0583 .

The dollar index , which measures the greenback against six major currencies, was flat at 105.75 after slipping towards a three-week low in the previous session.

The greenback also slipped against the Swiss franc, down 0.2% at 0.8762 franc .

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Post-payrolls, U.S. rate futures priced in an 87% chance the Fed will lower interest rates by 25 basis points (bps) at its policy meeting later this month, up from about 70% just before the data’s release, according to LSEG calculations.
The odds of a pause, meanwhile, dropped to 13% from 30% ahead of the jobs report.

In Asia, the dollar rose versus South Korea’s won after local media reported the nation’s main opposition Democratic Party said lawmakers were on standby after receiving reports of another martial law declaration.

The won weakened, leaving the dollar up 0.3% at 1,421.6.

The political upheaval has kept Korean markets on tenterhooks even as authorities pledged to provide “unlimited liquidity” to stabilize conditions.

Elsewhere, China’s yuan was little changed against the dollar but headed for its 10th straight weekly loss amid concerns new tariffs threatened by U.S. President-elect Donald Trump will heighten strains on the struggling Chinese economy.

The dollar last changed hands at 7.2779 yuan in the offshore market, up 0.2% .