Key facts
- The dollar index was steady at 102.20 early on Monday after rising about 0.7% on Friday.
- The euro edged up 0.1% to $1.11485 after falling 0.7% on Friday to a low of $1.1132.
- The Aussie added 0.3% to $0.6875 after tumbling more than 1% on Friday to $0.6855.
- Futures imply around 79% odds the Fed raises rates on December 9, versus 71% a week earlier, per CME Group's FedWatch tool.
- Preliminary New Zealand results gave Christopher Luxon's National Party, ACT New Zealand and New Zealand First 67 seats in a 131-seat parliament.
- About 400,000 votes, nearly 15%, remain uncounted, with official results due November 27.
The US dollar traded not far from a 1-1/2-year high against the euro and a seven-month high against the Australian dollar on Monday, November 9, after its largest rise in nearly six months on Friday. The move followed US data showing jobs growth accelerated in October while the unemployment rate fell, which pushed up bets on higher interest rates.
The dollar index, which measures the currency against six major rivals including the euro, was steady at 102.20 early on Monday after leaping around 0.7% on Friday. The euro edged up 0.1% to $1.11485, after slumping 0.7% on Friday and hitting a low of $1.1132, not far from the trough of $1.1105 a week earlier, the weakest since May 2025. The Aussie added 0.3% to $0.6875 after tumbling more than 1% on Friday to $0.6855, its lowest since March 31. The dollar eased 0.2% to 158.185 yen following Friday's 0.6% jump.
Futures imply around 79% odds the Federal Reserve will raise rates on December 9, compared with 71% a week earlier, according to CME Group's FedWatch tool. Bets on Fed tightening had been receding amid a rout in global tech stocks as investors weighed the outlook for AI investment, profitability and regulation, particularly after Democrats swept the US midterm elections earlier in November.
Barclays strategists wrote in a report that the Democratic sweep has put the AI trade to the test given risks of heavier AI regulation and a slowdown in the capital spending cycle, while economic data momentum remains strong. They said the combination is yet to dent the dollar's appeal.
Comments from Fed officials on Friday supported views for a rate hike. New York Fed President John Williams said US economic growth has remained remarkably resilient in the face of successive shocks but inflation is too high and it is essential to bring it back to 2%. St. Louis Fed President Alberto Musalem said inflation remains a top concern in conversations with businesses in his Midwestern district. San Francisco Fed President Mary Daly said the Fed will likely still need to hike rates further even with the painful tech stock selloff.
Bank of Japan Governor Kazuo Ueda said on Friday the central bank expects underlying inflation to stay around its 2% target but recognises there are some upside risks.
Sterling edged up 0.1% to $1.3360, while the greenback eased 0.1% to C$1.4119. On Friday, the US currency rose 1.1% against Canada's loonie after Canadian data showed surprise job losses.
The New Zealand dollar climbed 0.4% to $0.5557 on Monday, bouncing back after hitting a low of $0.5529 at the end of last week. Preliminary results in New Zealand's elections gave Prime Minister Christopher Luxon's National Party, ACT New Zealand and New Zealand First 67 seats in a 131-seat parliament, one more than the 66 required for a majority. Almost 400,000 votes, or nearly 15%, have yet to be counted, and official results are not due until November 27. Both Luxon and Labour leader Chris Hipkins have said they would wait for final results before entering formal coalition negotiations.