The dollar performed robustly on Friday, posting its best week in two months. Upbeat economic data and the easing tensions in Tehran contributed to this.
Against the yen, the buck has gained 1.3% so far in the week. The dollar index, meanwhile, has been up 0.6%. This index gauges the US dollar’s strength against a basket of six other major currencies.
Recent economic signals have also been stronger. For one, data showed that the service sector is alive and kicking again. Additionally, there have been falling jobless claims. Private hiring, not falling behind, has also been better.
The US employment report, or jobs data, will come out later in the day. As a result, the forex market will likely move according to the release.
Forecasts have it that the US provided 164,000 extra jobs in December. In November, the data showed the American economy added 266,000 jobs.
Tehran War Concerns Ease
The prospect of a broader conflict in the Middle East has ebbed. Both the US and Iran backed away and claimed neither was seeking an escalation.
According to Trump, Iran was “standing down” after the recent airstrike on Iraqi military bases that housed US troops. There were zero casualties, and the US military wasn’t going to respond.
However, Trump said Iran would have to face more economic and financial sanctions. These sanctions will remain until Iran changes its behavior.
Unemployment Reports and Other Economic Data
Elsewhere, apart from the US unemployment report, other forex-important news moved Europe.
In the UK, the Withdrawal Agreement has passed legislation and is now moving up to the House of Lords. If votes confirm it, the UK will officially be moving out of the European Union on January 31.
It will also mark the start of the 11-month transition period, where MPs negotiate a trade deal with the EU.
There will also be a flurry of economic data coming out. These reports include the unemployment rate in Switzerland, Bank of France’s December industry sentiment indicator, and French November industrial and manufacturing production data.