Taking it into account, one would hardly be surprised by a rise in the greenback yesterday after the release of the US jobless claims report. The unemployment rate has been declining for the fourth week in a row. This indicator is usually released before the monthly NonFarm Payrolls.

The ADP report for January is on tap today. Market participants are sure to analyze it carefully, especially average hourly earnings. The US dollar is likely to extend its rally which began on Thursday, consolidating in the range of 101.7-102.0.

Its rise could last at least until the publication of NonFarm Payrolls. Its movements were also influenced by the rate decisions of the ECB and the Bank of England. Both regulators raised rates by 50 basis points.

While the rhetoric of BoE officials was dovish, the ECB remained extremely hawkish. The ECB began to hike rates aggressively relatively not long ago. It appears it will end the tightening cycle later than other central banks.

The euro is losing momentum versus the US dollar due to soaring inflation. Investors are getting rid of the euro and the pound sterling. It is bullish for the US currency. Therefore, it entered the upward channel again yesterday. It rose to 101.9 in the Asian session.

The movements of the dollar/yen pair were affected by the BoJ statements. Although those price changes were rather modest compared to other currencies, the yen was able to reach the intraday low of 128.5. It was trading at 128.6 in the morning.

As investors expect the Fed to cut interest rates in the second half of this year, US government bond yields slipped lower. The yield gap between Japanese and US government bonds is narrowing. It may reinforce the bearish trend in the pair. In the Asian session, the yen managed to withstand the pressure of the US dollar. It was moving in the price channel of 128.5-128.8.

Meanwhile, in his speech today, Haruhiko Kuroda stressed the importance of maintaining an ultra-loose monetary policy to support the economy and prod companies to raise wages.

Given that his term ends on April 8, traders are musing about the possible candidates for this post. For example, now, the majority is betting on the appointment of Former Bank of Japan Deputy Governor Hiroshi Nakaso. He now holds a post in the Asia-Pacific Economic Cooperation advisory council.

The Aussie failed to retain its upward movement. In the Asian session, it tumbled to 0.7046. Although oil regained some of its losses and China’s services sector revived, the Aussie was unable to climb. The US dollar was fairly stronger. Besides, another negative factor is falling commodity prices.

On top of that, inflation in the country keeps rising without showing any signs of a decline. So, the Aussie slid down due to the likelihood of a recession in the economy. The AUD/USD pair entered the downward channel of 0.7045–0.7085.
The New Zealand dollar also failed to climb despite positive news from China. While New Zealand stocks are approaching annual highs, the kiwi is losing steam. On Friday morning, the NZD/USD pair edged lower to 0.6463. Inflation in the country has peaked. In the fourth quarter, the reading turned out to be lower than predicted.

The Reserve Bank of New Zealand is now expected to become less hawkish after its sharp 75- basis point rate hike in November. It may also limit the upward potential of the kiwi. In the Asian session, it was trading in the range of 0.6456-0.6483.

00:00 Intro
00:36 US Fed
01:56 USDX
03:37 USD/JPY
04:32 Haruhiko Kuroda
05:08 AUD/USD
05:50 NZD/USD

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