Dollar index soars as Fed's near term rate cut seen far fetched

The dollar index is extending upside towards a 26-month high on Monday morning in Asia following stronger-than-expected US jobs report that further cemented possibility of a slowdown in pace of Federal Reserve interest rate cuts this year. Data from the US Bureau of Labor Statistics (BLS), released on Friday, reported that Nonfarm Payrolls (NFP) increased by 256K in December, significantly exceeding market expectations of 160K and surpassing the revised November figure of 212K. Moreover, the US unemployment rate edged down to 4.1% in December from 4.2% in November. Soaring US treasury yields at 4.76% are pushing the greenback higher. The US Dollar Index (DXY), which tracks the US Dollars (USD) performance against six major currencies, reached 109.83 this morning, the highest level since November 2022. Among basket currencies, EURUSD and GBPUSD stayed stressed at $1.0252 and $1.2148 respectively.

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