Dollar increases as Fed hawks circle

The dollar jumped versus its more risk-sensitive Australian and New Zealand matches on Friday, before crucial U.S. jobs data that could clear the path to earlier Federal Reserve interest rate hikes, even as Omicron difficulties cloud the outlook.

Fed officials talking on Thursday joined Chair Jerome Powell in prominent hawkish stances. San Francisco Fed President Mary Daly said it might be time to “start crafting a plan” to increase rates to fight inflation and Richmond Fed President Thomas. Barkin threw his support after “normalizing policy.”

Meantime, the continued spread of the Omicron coronavirus variant globally buoyed havens like the dollar and yen and pressed more unstable currencies. Omicron has swiftly established itself as the predominant strain in South Africa, first spotted last month. It has now been detected in five U.S. states, including Hawaii.

The dollar index gauges the dollar versus six major peers. It gained 0.09% to 96.173, fixing it up for a 0.11% advance for the week. That would be a sixth weekly gain, the longest after January 2015.

Money markets see high odds that the Fed will increase the target rate by a quarter-point at its June conference.

Powell repeated in testimony to Congress on Wednesday that he and fellow policymakers will examine swifter action at their Dec. 14-15 meeting.

Economists in a Reuters survey estimate the United States produced 530,000 new jobs last month, extending a run of solid data.

Currency state

The dollar was even at 113.21 yen.

The euro was little modified at $1.12975, mixing after its decline to an approximately 17-month low at $1.1186 last week.

The Aussie fell 0.26% to $0.7076, a fourth losing session, and earlier reached a 13-month low of $0.70625.

The European Central Bank and Reserve Bank of Australia determined policy on Tuesday. They have attached to dovish stances, pushing back versus market bets that policymakers will be required to bow to inflationary pressures.

New Zealand’s kiwi dollar dropped 0.33% to $0.6795.