US Dollar Index hits weekly highs above 102.00 ahead of October's NFP

The US Dollar (USD) is showing the strongest performance among major currencies on Friday, amid a mix of risk aversion, following a tech-led rout in equity markets, and investors’ hopes of a strong US Nonfarm Payrolls (NFP) report later in the day.

The DXY accelerates its recovery in risk-off markets and hits weekly highs just above 102.00.

The safe-haven US Dollar is outperforming its peers as global equity markets tank, dragged down by tech shares.

Investors are bracing for a strong US NFP later in the day after a string of positive labour market reports throughout the week.

The US Dollar Index (DXY) appreciates 0.4% at the time of writing, reaching weekly highs just above 102.00.

Markets are strongly averse to risk on Friday, following sharp declines in global equity markets, as investors sold chipmakers' shares, concerned that the Democrats' victory in the US midterm elections will bring tougher regulations to the AI sector and push back plans to build new data centres.

Dollar support seen as Fed jobs view underpins defensive FX positioningOn the macroeconomic front, the focus is on October’s US Nonfarm Payrolls report, which is expected to show a 65K net increase in employment, following a 29K rise in September.

Labour data released earlier this week, namely Wednesday's ADP Employment Change Report and Thursday's weekly Jobless Claims, have shown better-than-expected figures, boosting hopes of a positive surprise on Friday’s NFP report.

Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure.