The dollar index (DXY00) rose to a 1-month high on Friday, up by +0.20%, supported by a mixed US payroll report. Dec nonfarm payrolls rose +50,000, weaker than expected, but unemployment fell to 4.4%. Average hourly earnings rose +3.8% y/y. The dollar also gained strength from a rise in consumer sentiment.

The dollar received additional support after the Supreme Court postponed a decision on President Trump’s tariffs. If struck down, the dollar could face pressure due to increased budget deficit concerns. The markets are only pricing in a 5% chance of a rate cut at the next FOMC meeting.

EUR/USD (^EURUSD) fell to a 1-month low on Friday due to dollar strength. However, the euro was supported by positive economic data, with Eurozone Nov retail sales rising more than expected and German Nov industrial production unexpectedly increasing. The ECB is expected to leave rates unchanged.

USD/JPY (^USDJPY) rose by +0.66% on Friday, pushing the yen to a 1-year low against the dollar. The yen faced pressure from a stronger dollar, higher T-note yields, and political instability in Japan. However, Japanese economic indicators were supportive of the yen.

Gold and silver prices surged on Friday after President Trump directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds, boosting demand for precious metals. Safe-haven demand, concerns over US tariffs, and a dovish Fed outlook also supported prices. Central bank and fund demand remain strong for gold and silver.

Read more at Yahoo Finance: Dollar Climbs as Fed Rate Cut Expectations Recede