Euro Falls, US Dollar Index Rises, and Canadian Dollar Is Flat
US dollar index rose by 0.75%
The US Dollar Index measures the strength of the US dollar against the major currencies. It rose by 0.75% to 98.3 on Friday, December 4, 2015. It fell nearly 2.4% on Thursday. The ECB’s (European Central Bank) monetary policy failed to live up to the market expectations. This caused the euro to rise. The US Dollar Index rose to 98.6.
Labor report established a case for the rate hike
The Bureau of Labor Statistics published the employment report for November on December 4, 2015. The non-farm employment payroll rose by 211,000 in November. The major job growth occurred in construction, professional and technical services, and healthcare. The mining and information sectors experienced a fall in jobs. The unemployment rate remained unchanged at 5%. The participation rate rose by 0.1% to 62.5. The positive data are expected to encourage the Fed to go forward with the rate hike plans for the first time in nearly ten years. The meeting will be on December 15.
Impact on the market
In terms of the ETFs, the PowerShares DB US Dollar Bullish ETF (UUP) rose by 0.71% on December 4, 2015. The WisdomTree Bloomberg US Dollar Bullish Fund ETF (USDU) encompasses developed economies as well as emerging market currencies. It rose by 0.33%.
The banking ADRs (American depositary receipts) were trading on a positive note on December 4, 2015. JPMorgan Chase (JPM) rose by 3.2% while Citigroup (C) rose by 3.0%. Wells Fargo (WFC) also followed a similar trajectory. It rose by 2.7% for the day.
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