The dollar was up Monday as investors weighed the impact of a hot US jobs report on Federal Reserve hikes and an accelerated shift towards the reopening of the Chinese economy.
The small gains in the dollar against most of its Group-of- 10 counterparts still left a gauge of the currency's strength near a five month low.
Instead of boosting their bets for a bigger hike at the Fed's December meeting when policy makers are expected to reduce their bets to a 50 basis points hike, traders increased their bets on where rates will top out.
Equity futures for Japan fell while the futures for Australia and Hong Kong went up. The S&P 500 fell 0.1% on Friday after a drop of 1% earlier in the day.
A surge in Treasury 10 year yields fizzled out, while two-year rates - which are more sensitive to imminent Fed moves - remained higher.
Chinese shares are likely to be boosted Monday after authorities eased some Covid restrictions in Shanghai and Hangzhou after protests against the nation's stringent policies last week.
The US employers added more jobs than predicted and wages went up by the most in nearly a year. Nonfarm payrolls went up 263,000 in November, while the unemployment rate was 3.7%. The average hourly earnings rose twice as much as predicted.
Seema Shah, a principal asset management analyst, said that 263,000 jobs were added even after policy rates have been raised by some 350 basis points. The labor market is hot, hot, and the Fed is under pressure to raise policy rates. What is in the jobs report to convince them not to take policy rates above 5%? The offshore yuan rose by 0.2% to 7.0210 per dollar.
The story was produced with the help of Bloomberg Automation.