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Dollar Mixed Following Strong December Job Growth


The dollar is turning in a mixed performance against its major rivals Friday afternoon. The buck is losing ground against its major European rivals, but is rising against the Japanese Yen.

The focus this morning was on the stronger than expected U.S. jobs report for December. However, traders also had to contend with comments from Fed Chair Jerome Powell.

Employment in the U.S. spiked by much more than anticipated in the month of December, according to a closely watched report released by the Labor Department on Friday.

The Labor Department said non-farm payroll employment soared by 312,000 jobs in December after climbing by an upwardly revised 176,000 jobs in November.

Economists had expected employment to increase by about 177,000 jobs compared to the addition of 155,000 jobs originally reported for the previous month.

Despite the much stronger than expected job growth, the report said the unemployment rate rose to 3.9 percent in December from 3.7 percent in November. The unemployment rate had been expected to come in unchanged.

Federal Reserve Chairman Jerome Powell noted Friday the central bank "will be patient" with monetary policy as it watches the economy evolve.

Powell stressed that monetary policy is not on a "preset path" after the Fed raised interest rates four times in 2018 and forecast two rate hikes in the new year.

"Particularly with muted inflation readings that we've seen coming in, we will be patient as we watch to see how the economy evolves," Powell said.

The dollar rose to a high of $1.1345 against the Euro Friday, but has since retreated to around $1.1410.

Eurozone's consumer price inflation slowed more-than-expected in December to its lowest level in eight months, and the private sector expanded the weakest pace in over four years, damping expectations for an interest rate hike from the European Central Bank in the near term.

The consumer price index rose 1.6 percent year-on-year following a 1.9 percent increase in November, preliminary figures from Eurostat showed on Friday. Economists had forecast 1.8 percent inflation.

Elsewhere, survey data from IHS Markit showed that Eurozone Composite Purchasing Managers' Index, or PMI, fell to 51.1 from 52.7 in November. The final reading was weaker than the flash estimate of 51.3.

Germany's unemployment decreased more-than-expected expected in December, and the jobless rate held steady at a record low, despite the economy showing signs of a slowdown.

The number of unemployed dropped by 14,000, data from the Federal Employment Agency showed on Friday.

That was a bigger fall than the 13,000 decrease economists had predicted. Joblessness had decreased by 16,000 in November.

France's consumer price inflation slowed for a second straight month in December, preliminary figures from the statistical office INSEE showed on Friday. The consumer price index rose 1.6 percent year-on-year following a 1.9 percent increase in November. Economists had forecast 1.8 percent inflation.

The buck reached a high of $1.2615 against the pound sterling Friday, but has since pulled back to around $1.2730.

British services sector expanded at a faster-than-expected pace at the end of 2018 amid modest gains in activity and demand, yet the overall business situation remained subdued, survey data from IHS Markit showed on Friday.

The CIPS UK Services Purchasing Managers' Index rose to 51.2 from November's 50.4, a 28-month low. Economists had forecast a score of 50.7.

UK house mortgage approvals in November decreased more-than-expected from the previous month to its lowest level in seven months, data from the Bank of England showed on Friday.

The number of mortgages approved for house purchase - which lead to future mortgage lending - fell slightly, to 63,728 in November, the bank said. A figure lower than this was last seen in April, when approvals totaled 63,421.

Economists had predicted 66,000 approvals for November.

UK house price inflation slowed sharply in December to its weakest level since early 2013, as buyer confidence eroded amid the persistent uncertainties linked to Brexit, results of a key survey showed on Friday.

The house price index rose 0.5 percent year-on-year following a 1.9 percent increase in November, the Nationwide Building Society reported. Economists had forecast a 1.5 percent increase. In December 2017, house price inflation was 2.6 percent.

The greenback has inched to around Y108.525 against the Japanese Yen Friday afternoon, from a low of Y107.514.

The manufacturing sector in Japan continued to expand in December, and at a faster rate, the latest survey from Nikkei revealed on Friday with a PMI score of 52.6. That's up from the 15-month low of 52.2 in November, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

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