The dollar index (DXY00) rallied to a 1-month high on Friday and finished up by +0.20%. The dollar found support from Friday’s mixed US payroll report, which showed payrolls rose less than expected but the unemployment rate ticked down and average hourly earnings rose more than expected, hawkish factors that may keep the Fed from cutting interest rates. The dollar added to its gains on Friday after the University of Michigan’s US Jan consumer sentiment index rose more than expected.
The dollar also rose on Friday after the Supreme Court deferred on the legality of President Trump’s tariffs until next Wednesday. If the Supreme Court were to strike down Mr. Trump’s tariffs, the dollar could come under pressure as the removal of tariff revenue could worsen the US budget deficit.
