By Brigid Riley
TOKYO (Reuters) – Major currencies remained choppy on Friday as markets awaited U.S. jobs data and weighed the impact of a politically tumultuous week that saw the collapse of the French government and the imposition of a brief martial law in South Korea.
The US dollar rose briefly against South Korea’s won after local media reported that the country’s main opposition Democratic Party said lawmakers were on alert after receiving reports of martial law.
Profits were last down 0.42% at 1419.27.
South Korean President Yoon Suk-yeol shocked the nation and his own ruling People’s Power Party on Tuesday when he imposed martial law, then lifted it hours later, sending jitters across global financial markets.
The political upheaval kept Korean markets on edge, even as the government pledged to provide “unlimited liquidity” to stabilize conditions.
Faced with political turmoil at home, the euro fell 0.14% to $1.0573 after recovering on Thursday as French bonds steadied.
French President Emmanuel Macron met with allies and parliamentary leaders on Thursday as he sought to quickly appoint a new prime minister to replace Michel Barnier, who formally resigned a day after opposition lawmakers voted to oust his government.
For now, the European Central Bank will not react to heightened political turmoil in Europe when it meets next week, with traders and economists fairly confident it will cut rates by 25 basis points on December 12.
The euro was on track for a weekly loss, its fourth in five weeks.
US Jobs Report in Focus
On the broader economic front, the focus will be on the non-farm payrolls report due in November as investors look to second-guess the pace of future Federal Reserve rate cuts.
Payrolls were expected to rise by 200,000 jobs last month, according to a Reuters poll, after rising by just 12,000 in October, the slowest rate since December 2020. The unemployment rate was forecast to reach 4.2%.
Markets currently see a roughly 72% chance the Federal Reserve will cut rates by 25 basis points at its Dec. 17-18 meeting, up from 66.5% a week ago, the CME FedWatch tool showed.
“The Fed will be wary of a sharp increase in wages expected in November,” said Sean Callow, senior FX analyst at InTouch Capital Markets.
“Until the unemployment rate returns to 4.0%, markets should be comfortable with a rate cut this month, which should hamper dollar stocks.”
Which measures the lark against six rivals, rose 0.10% to 105.82, after hitting a three-week low in the previous session.
China’s yuan was little changed against the dollar but headed for a 10th straight weekly loss, amid concerns that new tariffs threatened by President-elect Donald Trump will add to the strain on China’s economy and whether Beijing will ease currency controls. Export support.
7.2578 was mostly unchanged. It also traded roughly flat at $7.2632.
In cryptocurrencies, Bitcoin took a breather after breaking above $100,000 for the first time a day earlier.
It briefly fell to a one-week low and ended down 1.15% at $97,870, well below its all-time high of $103,649 the day before.
Trump announced Thursday that he was appointing former PayPal (NASDAQ:: ) chief operating officer David Sachs to be his artificial intelligence and cryptocurrency czar.
The dollar was down 0.11% against the yen at 149.90 as traders pondered the possibility of a December rate hike in Japan. Japanese household spending fell 1.3% in October from a year earlier, better than expected, government data showed.
Elsewhere, sterling traded at $1.2748, down 0.09% today.
The Australian dollar hit $0.64285, down 0.37%, and was down 0.43% to trade at $0.58595.