The U.S. dollar strengthened significantly on the back of robust jobs data, leaving other major currencies struggling to keep pace. The latest report revealed better-than-expected payroll growth, reinforcing market expectations that the Federal Reserve could maintain higher interest rates for longer. This surge in the dollar index weighed heavily on the euro, yen, and pound, as investors recalibrated their positions.
Analysts noted that the labor market’s resilience underscores the Fed’s challenge in balancing inflation control without stifling economic growth. The yen slipped to near 150 per dollar, while the euro fell below $1.06. Meanwhile, emerging market currencies also faced headwinds as capital flows favored dollar-denominated assets.
The renewed strength in the dollar has prompted concerns about tightening global financial conditions. With the greenback trading at multi-week highs, market participants are closely monitoring upcoming Fed statements for further policy cues.
