Daily Market Key Points

• Dollar Strength: The U.S. dollar approached a one-week high against major currencies after a significant drop in U.S. jobless claims alleviated fears of an economic downturn.
• Yen and Swiss Franc: The yen and Swiss franc, both safe-haven currencies, hovered near one-week lows as global stock markets gained and U.S. Treasury yields dipped.
• Employment Data Impact: Stronger-than-expected U.S. employment data reduced expectations of Federal Reserve interest rate cuts, contributing to the dollar’s strength.
• Market Reaction: The dollar edged down slightly against the yen and Swiss franc, but remained on track for weekly gains against both currencies.
• Fed Rate Cut Speculation: The probability of a 50 basis point Fed rate cut in September fell to 55%, while a 25 basis point cut was seen as 46% likely.
• Yen’s Short Unwind: The yen surged earlier in the month due to an unwinding of short positions, but this trend appears to have stabilized.
• Currency Movements: The euro, sterling, and Australian and New Zealand dollars all experienced fluctuations but remained close to recent levels.

The U.S. dollar neared a one-week high against major currencies on Friday following a sharp drop in U.S. jobless claims, which eased concerns about an economic downturn. The dollar was steady against the yen after a three-day rebound, as strong employment data led to reduced expectations for Federal Reserve rate cuts. The yen and Swiss franc, both considered safe-haven currencies, remained near one-week lows as stock markets rose and Treasury yields fell. The dollar saw mixed movement, edging down slightly against the yen and franc but still on track for weekly gains. Speculation around Fed rate cuts in September shifted, with the likelihood of a 50 basis point cut decreasing. Meanwhile, the yen’s earlier surge due to unwinding of short positions appeared to stabilize. The euro, sterling, and Australian and New Zealand dollars also experienced minor fluctuations.