TOKYO, Nov 9 (Reuters) – The US dollar held near a 1-1/2-year high versus the euro on Monday after posting its biggest gain in nearly six months on Friday as robust US jobs data pushed up bets for higher interest rates.
The risk-sensitive Australian and New Zealand dollars rallied as a rebound in AI-related stocks buoyed market sentiment.
The Aussie rose 0.4% to $0.68875 as of 0517 GMT, rebounding from a more than seven-month low at $0.6855 from Friday, when it tumbled more than 1%.
New Zealand’s kiwi jumped 0.8% to $0.5589, bouncing back after hitting a low of $0.5529 at the end of last week.
Japan’s tech-heavy Nikkei share average gained 2.8%, while Taiwan’s Taiex rallied 5.3% and South Korea’s KOSPI added 0.4%.
“With the dust now settling a bit, investors are starting to ease back into risk assets,” said Kyle Rodda, senior financial market analyst at Capital.com.
“The Aussie is trading with its typical correlation to risk.”
Kiwi traders were also weighing the implications of too-close-to-call weekend elections that weakened New Zealand’s government, although who will lead the country will not be known until vote counting is completed on November 27.
The US dollar index, which measures the currency against six major rivals including the euro, eased 0.1% to 102.11, after leaping around 0.7% on Friday, when stronger-than-expected data showed jobs growth accelerated in October while the unemployment rate fell.
The euro edged up 0.2% to $1.1159, after slumping 0.7% on Friday and hitting a low of $1.1132, not far from the trough from a week earlier at $1.1105, the weakest since May 2025.
Sterling rose 0.2% to $1.3381.
The dollar eased 0.2% to 158.255 yen, following Friday’s 0.6% jump.
Futures imply around 81% odds the US Federal Reserve will raise rates on December 9, compared to 71% a week earlier, according to CME Group’s FedWatch tool.
Bets on Fed tightening next month had been receding amid the rout in global tech stocks as investors worried about the outlook for AI investment, profitability and regulations, particularly after Democrats swept the US midterm elections earlier this month.
“The Blue Sweep has put the AI trade to the test given risks for heavier AI regulation and a slowdown in the CAPEX cycle. At the same time, however, economic realities continue to surprise to the upside — data momentum remains very strong across indicators,” Barclays strategists wrote in a report. “This combination is yet to dent the dollar’s appeal.”
Comments from Fed officials on Friday supported views for a rate hike. New York Fed President John Williams said US economic growth has remained remarkably resilient in the face of successive shocks but inflation is too high and must be brought back to 2%.
St. Louis Fed President Alberto Musalem said inflation remains a top concern among businesses in his Midwestern district, while Fed Bank of San Francisco President Mary Daly said the Fed will likely need to hike rates further even with the “painful” tech stock selloff.
(Reporting by Kevin Buckland; Editing by Chris Reese and DJ Yap)
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