The U.S. dollar index (DXY) surged to a one-month high on Friday, closing up 0.20%. This rally was influenced by mixed U.S. payroll data for December, which revealed a rise of 50,000 jobs—below the expected 70,000. However, the unemployment rate decreased to 4.4%, down from 4.5%, and average hourly earnings increased by 3.8% year-over-year, exceeding expectations. In the same context, the University of Michigan’s consumer sentiment index for January rose to 54.0, surpassing the forecast of 53.5.
In foreign exchange movements, the euro fell to a one-month low, down 0.21%, despite stronger-than-expected retail sales and industrial production data from the Eurozone. The Japanese yen also dropped to a one-year low against the dollar, primarily due to anticipated policy decisions from the Bank of Japan and increasing political instability in Japan. The yen’s weakness was exacerbated by rising tensions with China, following export controls related to military items.
In commodities, gold and silver prices rose on Friday, with February gold up $40.20 to close at $4,527.00 per ounce, and March silver up 4.197 to $79.40 per ounce. These increases were partly driven by President Trump’s directive for Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds, an effort to stimulate demand. However, estimates from Citigroup indicate potential outflows of $6.8 billion from gold and silver futures due to a broad rebalancing of commodity indexes.
