Foreign exchange market data

U.S. Jobs Surge to 256,000 Boosts Dollar, Signals 97% Chance of Fed Rate Cut Pause

Jan 10, 2025, 02:33 PM

U.S. job growth in December likely slowed to a still-healthy pace, with the unemployment rate holding steady at 4.2%, according to data that supports the Federal Reserve's cautious approach toward interest rate cuts this year. The strong labor market performance, with nonfarm payrolls increasing by 256,000 jobs against expectations of 160,000, has led to a bolstered dollar and a 97% probability of the Fed pausing rate cuts at its next meeting. The robust job data has also influenced market expectations, reducing the anticipated number of rate cuts for the year to one 25 basis-point cut from nearly two previously. The dollar rose to its highest level since July against the yen following the report, while the U.S. stock market experienced declines.