Dollar edges up ahead of US jobs data, Supreme Court ruling on Trump’s tariffs

Markets brace for US Supreme Court ruling on Trump’s tariffs.

The dollar edged up on Friday as markets awaited a U.S. jobs report ​and braced for an approaching Supreme Court decision on President Donald Trump’s use of emergency tariff powers.

The dollar index measuring the U.S. currency against a basket of six ⁠peers was up 0.16% at 99.04, to its highest in a month.

The looming U.S. non-farm December payrolls report will dispel much of the data fog resulting ⁠from ‌a recent government shutdown, but analysts said nuances in the figures may do little to clarify the path for interest rates.

“Expectations have grown that today’s U.S. jobs report will be decent enough to keep the Fed put for longer, and that ⁠the Supreme Court will rule against Trump’s tariffs,” said ING currency strategist Francesco Pesole.

“The combination of those would, in our view, prove modestly USD positive.”

Thursday’s weekly jobless claims data showed a marginal increase in applications for unemployment benefits.

Fed funds futures are pricing an implied probability of 86% that the central bank holds interest rates at its next two-day meet on January 27 and 28, up from 68% a month ago, ⁠the CME Group’s FedWatch tool shows.

The U.S. Supreme ​Court could issue a ruling later in the day determining whether Trump can invoke the International Emergency Economic Powers Act (IEEPA) to impose tariffs without the approval of Congress.

That risks upending U.S. ‍trade policy and throwing into disarray months of negotiations with partner nations.

If the decision goes against Trump, company executives, customs brokers and trade lawyers are girding for a possible fight to ​secure refunds of about $150 billion from the U.S. government for duties already paid.

EURO DOWN AS GERMAN EXPORTS DECLINE

The euro edged 0.12% lower at $1.1644, after data showed German exports unexpectedly fell in November as shipments to other European Union countries and the U.S. dropped, while industrial output rose despite expectations for a decline.

Against the yen, the dollar advanced for a fourth day , climbing to its highest since December 22.

It was last up 0.47% to 157.61, after data showed Japanese household spending unexpectedly grew in November from a year earlier, indicating that consumption accelerated before the Bank of Japan lifted its policy rate to a 30-year high in December.

Governor Kazuo Ueda has said the BOJ would continue to raise borrowing costs if economic and price developments move in line with its forecasts.

Against the Chinese yuan trading offshore in Hong Kong , the dollar was holding steady at 6.9808 yuan, ⁠little changed after China’s annual consumer price inflation accelerated in December to its highest in ‌almost three years.

However, the full-year rate slumped to the lowest in 16 years and producer deflation persisted, boosting market expectations for more stimulus to shore up soft demand.

Elsewhere, the pound fell 0.2% to $1.3415, while the Australian and New Zealand dollars were also on the back foot with the Aussie down ‌0.3% at $0.6677. The ⁠kiwi dollar slipped 0.45% to $0.5727, down for the fourth consecutive session to its lowest point since early December.

Bitcoin was down 1% at $90,172.65, while ether gave up 0.96% ⁠to stand at $3,085.43.

© ZAWYA