Dollar Surge Sparks Global Shifts Amid Booming U.S. Economy

The dollar surged to a multi-year high after a robust U.S. jobs report highlighted economic strength, casting doubts on Federal Reserve rate cuts. Major currencies hit new lows, with the euro and pound notably impacted. Beijing countered the trend, boosting the yuan as global markets reacted to shifting U.S. economic policies.

The dollar soared to a multi-year high on Monday following a bullish U.S. jobs report, prompting a ripple effect across global currencies. The greenback's strength, peaking at 109.98, highlighted the resilience of the U.S. economy and complicated expectations for Federal Reserve rate cuts in the coming year.

Asian trading was reduced due to a holiday in Japan, yet the forex market saw significant volatility. The euro and the British pound took notable hits, with the euro declining to $1.0275, its lowest since November 2022, and the pound dropping over 0.5% to a 14-month low of $1.2128, amid domestic financial concerns.

Meanwhile, the yuan defied the trend, climbing after China's central bank, the PBOC, adjusted policies to combat the falling currency. The yuan's boost came from eased rules for offshore borrowing and verbal interventions, as China aims to stabilize its economy against looming global uncertainties and the returning Trump administration's policies.

(With inputs from agencies.)