The U.S. dollar moved higher on Friday during quiet Asian trading, as investors awaited fresh U.S. jobs data and prepared for an upcoming Supreme Court decision regarding President Donald Trump and his use of emergency tariff powers.
The dollar index, which tracks the greenback against six major currencies, rose 0.1% to 98.933, hovering near a one-month high. Attention is firmly on the U.S. nonfarm payrolls report for December, which is expected to clear some of the uncertainty caused by the recent government shutdown. However, analysts caution that the data may still offer limited guidance on the future direction of interest rates.
According to analysts at ING, markets are likely to absorb a softer-than-expected payrolls number without significant reaction, unless the data delivers a major surprise. They added that the unemployment rate may prove more influential than headline job growth.
Earlier data showed weekly U.S. jobless claims edging slightly higher, pointing to only modest changes in labor market conditions.
Fed Expectations and Supreme Court Decision in Focus
Interest rate expectations continue to shift. Fed funds futures now imply an 86% probability that the Federal Reserve keeps rates unchanged at its January 27–28 meeting, according to the CME Group FedWatch tool. This marks a sharp increase from 68% just one month ago.
Markets are also watching the Supreme Court of the United States, which could issue a ruling later in the day on whether Trump can invoke the International Emergency Economic Powers Act to impose tariffs without congressional approval.
A decision against Trump could significantly disrupt U.S. trade policy and unravel months of negotiations with global partners. In that scenario, businesses and trade professionals are reportedly preparing to pursue refunds totaling around $150 billion for duties already paid.
Yen Weakens as Dollar Extends Gains
The dollar rose for a fourth consecutive session against the Japanese yen, climbing 0.3% to 157.29. The move came despite data showing Japanese household spending unexpectedly increased in November, suggesting consumer activity strengthened ahead of the Bank of Japan’s decision to raise interest rates to a 30-year high in December.
BOJ Governor Kazuo Ueda has reiterated that the central bank will continue tightening policy if economic and inflation trends remain aligned with its outlook.
Yuan Stable After Inflation Data
Against the offshore Chinese yuan traded in Hong Kong, the dollar held steady near 6.9797. This followed data showing China’s annual consumer inflation accelerated in December to its highest level in almost three years.
However, full-year inflation dropped to its lowest level in 16 years, while producer prices remained in deflation. These trends have reinforced expectations for additional stimulus to support demand. Analysts at Capital Economics warned that without stronger demand-side policies, excess capacity and deflationary pressures are likely to persist.
Other Currencies and Crypto Mixed
Elsewhere in Asia, most major currencies showed little movement. The euro was steady at $1.1655 ahead of upcoming German trade and euro-area retail sales data. Sterling held flat at $1.3436, while the Australian dollar remained unchanged at $0.6697. The New Zealand dollar slipped 0.2% to $0.5742.
In digital assets, Bitcoin fell 0.3% to $90,892.58, while Ether eased 0.2% to $3,111.40.
