The dollar found support in Monday’s early session after a strong US NFP that could point to a more aggressive central bank, while the Japanese yen fell on reports of who could be the next governor of the Bank of Japan. The , yen was down about 0. 2% to trade near 131.75 against the dollar after hitting a three-week low of 132.60 earlier in the session. Last Friday, the US Labor Department’s nonfarm payrolls report showed the US economy added 517,000 jobs in January, far higher than the 185,000 reported in a Reuters poll. Dollar extended its gains and traded higher on Monday, while the US dollar index was close to a -week high of 103.22 after a nearly 1.1% gain in Friday’s session. Last Wednesday, the Federal Reserve raised the reference interest rate by 25 basis points while signaling the direction of its anti-inflation efforts, which raised interest rates by 25 basis points, and the Fed’s comments led many market participants to expect that the central bank. be less aggressive going forward. However, the much higher than expected employment report prompted many economists to reassess the Fed’s future interest rates. “The concern, of course, is that much better-than-expected data is bad news if the Fed sees it as confirmation of two more rate hikes and a longer-term hold on interest rates,” said Tapas Strickland, head of markets. at National Australia. Bank. Federal Reserve policymakers appear to be somewhat optimistic about the potential for a “soft landing,” where inflation eases even as the labor market remains strong, according to Citi strategists. Friday’s , jobs report, however, could worry the Federal Reserve that labor conditions are too tight to remain in line with the inflation target, according to Citi. Market participants see the key interest rate hitting near 5.05% in June before the Federal Reserve begins cutting interest rates in the second half of the year. , In the US stock market, major US futures started the week lower, as many economists expect more earnings reports and a speech by Federal Reserve Chairman Powell. , Dow Jones futures fell about 110 points, while S&P 500 and Nasdaq 100 futures lost about 0. 5% and 0.55%, respectively. Disney, Chipotle, Dupont and PepsiCo are some of the companies expected to report earnings this week. So far, about 50% of SandP 500 companies have reported earnings. In the oil market, after last week’s loss of 8%, oil prices were slightly higher in the early session on Monday on concerns that a slowdown in the world’s largest economies could weigh on energy consumption, even as Chinese energy demand appears to be recovering. . Brent crude futures were up about 0. % to trade at $80.26 a barrel by 0700 GMT, while US West Texas Intermediate (WTI) crude futures were up 0.3% at $73.61 a barrel. In Friday’s session, WTI and Brent fell about 3% after a strong US jobs report raised concerns about a rate hike by the US Federal Reserve, which supports the US dollar. In general, a stronger dollar reduces demand for dollar-denominated oil by holders of other currencies.
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