The US currency remained near a five-month high after US employment data posted a surprising increase, with private sector employment increasing by about 42,000 in October, exceeding economists' expectations of 28,000.

This increase reinforces the market's belief that the Federal Reserve (the Fed) will pause or delay its monetary policy stance, making the dollar attractive relative to other currencies.

However, the dollar is not completely unhindered. US consumer sentiment fell to a three-year low due to the prolonged government shutdown and concerns about a weakening labor market.

This has raised expectations that the Fed may continue to cut interest rates in the future, which could, in turn, suppress further dollar appreciation.

Overall, while strong US economic data is supporting the dollar in the short term, the combination of lower interest rate expectations and weak consumer sentiment creates uncertainty. Therefore, while the dollar appears strong now, its outlook remains vulnerable to sudden changes in monetary policy or unexpected economic data.

Source: Newsmaker.id