Dollar strengthens to its best level in almost a month

The dollar rose to a near-month high on Friday, after economic data from USA They highlighted a still tight labor market that could lead the Federal Reserve to continue raising interest rates aggressively.

The number of Americans filing new claims for unemployment benefits fell to a three-month low last week, while layoffs fell 43% in December, data showed on Thursday.

A separate report also showed that private employment grew by 235,000 jobs last month, far exceeding expectations for an increase of 150,000.

The Dollar Index (DXY), which measures the greenback’s performance against a basket of six currencies, was up 0.3% at 105.45, after briefly touching a four-week high of 105.52.

The index is on track to post a weekly gain of almost 1.9%, the biggest since September.

Most major currencies trailed losses on Friday, after the dollar pushed them to multi-week lows in the previous session.

Against the Japanese yen, the dollar was up 0.7% at 134.58 yen, its highest level since the Bank of Japan changed its yield curve control policy on December 20 last year.

Markets now await the nonfarm payrolls report due later on Friday, with economists polled by Reuters forecasting the US economy will have added 200,000 jobs by December.

Meanwhile, inflation in the euro zone cooled last month, but underlying price pressures have increased, so the European Central Bank (ECB) is likely to continue tightening its monetary policy.

The euro was down 0.1% to a one-month low of $1.0497, after falling 0.8% in the previous session.