US Dollar ends the week on a downward trend after weak NFP data

The US Dollar closed out the week on a downward trend after disappointing nonfarm payroll (NFP) data was released on Friday. The NFP report, which is a key indicator of the health of the US economy, showed that only 210,000 jobs were added in November, falling short of the expected 550,000 jobs.

This weaker-than-expected NFP data caused investors to sell off the US Dollar, as it raised concerns about the strength of the US economy and the Federal Reserve’s timeline for tapering its bond-buying program. The US Dollar Index, which measures the value of the US Dollar against a basket of other major currencies, fell by 0.5% on Friday to close at 96.50.

The disappointing NFP data also weighed on US Treasury yields, with the yield on the 10-year Treasury note falling to 1.38% on Friday. Lower Treasury yields tend to make the US Dollar less attractive to investors, as they offer lower returns on US Dollar-denominated assets.

In addition to the weak NFP data, concerns about the Omicron variant of COVID-19 also contributed to the US Dollar’s decline. The new variant has raised fears of renewed lockdowns and travel restrictions, which could weigh on economic growth and further delay the Federal Reserve’s plans to tighten monetary policy.

Looking ahead, investors will be closely watching upcoming economic data releases, including inflation and retail sales figures, for further clues about the health of the US economy and the Federal Reserve’s next steps. Any signs of weakness in these reports could put further pressure on the US Dollar and push it lower against other major currencies.

Overall, the US Dollar ended the week on a downward trend after weak NFP data raised concerns about the strength of the US economy and the Federal Reserve’s monetary policy outlook. Investors will be keeping a close eye on upcoming economic data releases for further guidance on the direction of the US Dollar in the coming weeks.

• Source Link: https://zephyrnet.com/us-dollar-closes-a-losing-week-following-soft-nfp/