Why did the U.S. dollar go up
The U.S. dollar recently became stronger compared to other currencies.
Traders thought the U.S. Federal Reserve would not reduce interest rates as much as they previously expected.
This change happened after a positive report about jobs in the U.S.
What caused the change in expectations
The jobs report in the U.S. was better than what people thought it would be.
This led to higher returns on U.S. government bonds, making the U.S. dollar more attractive.
What did the head of the Federal Reserve say
Jerome Powell, who leads the Federal Reserve, suggested being careful about reducing interest rates too quickly.
His comments supported the idea that the Fed might not rush into cutting rates.
How much did the U.S. dollar rise
The dollar, compared to other major currencies, reached its highest level in almost three months.
The dollar index, which tracks the dollar against other currencies, reached 104.3, the highest since November 17.
What happened to other currencies
The Euro went down because of concerns about a slow German economy.
Japan’s yen and the British pound also decreased against the dollar.
What’s the situation in China
China’s currency, the yuan, struggled against the stronger dollar despite efforts by China’s central bank to stabilize it.
What about future expectations
The likelihood of the Federal Reserve cutting interest rates has decreased.
Traders now expect around 120 basis points of easing, down from about 150 bps earlier.
The chance of a rate cut in March has dropped from 50% to around 16%.
Anything else important
The ISM non-manufacturing survey will provide information about the U.S. economy in January. This is something to watch for.