The U.S. dollar strengthened at the beginning of the Asian session on Friday, as market participants anticipated the upcoming release of the latest U.S. jobs report and prepared for an impending U.S. Supreme Court ruling regarding President Donald Trump’s utilization of emergency tariff powers. The dollar index, reflecting the strength of the greenback against a basket of six currencies, increased by 0.2% to reach 98.883, marking its third consecutive day of gains. The upcoming U.S. non-farm payrolls report for December is expected to clear some of the uncertainty that has lingered due to the government shutdown. However, experts indicate that the subtleties within the data may not significantly illuminate the trajectory for interest rates.

The market is expected to exhibit significant tolerance towards a somewhat disappointing payrolls figure,” analysts stated in a research report. “Unless there is a significant shift in the data, the unemployment rate is expected to be the more influential figure.” On Thursday, the weekly jobless claims data indicated a slight uptick in the number of applications for unemployment benefits. The implied probability of the U.S. central bank maintaining interest rates at its upcoming two-day meeting on January 27-28 stands at 89%, as indicated by Fed funds futures. This marks an increase from the 68% probability recorded a month prior, based on data.

In the meantime, the U.S. Supreme Court may deliver a ruling later today that will clarify whether Trump has the authority to invoke the International Emergency Economic Powers Act for imposing tariffs without the need for congressional approval. This decision could significantly alter U.S. trade policy and disrupt months of ongoing negotiations. Company executives, customs brokers, and trade lawyers are gearing up for a potential battle over securing approximately $150 billion in refunds from the U.S. government for duties that have already been paid, should he face a loss. In relation to the yen, the dollar stood at 156.885 yen, showing minimal change following data that revealed an unexpected increase in Japanese household spending in November compared to the same month last year. This suggests that consumption picked up pace prior to the Bank of Japan raising its policy rate to a 30-year high in December. Governor Kazuo Ueda indicated that the BOJ will persist in increasing borrowing costs should economic and price trends align with its projections.

In the offshore market in Hong Kong, the dollar remained steady against the Chinese yuan at 6.982 yuan, as market participants awaited the upcoming release of December’s inflation data, expected in a few hours. In early Asian trade, the majority of global currencies exhibited minimal fluctuations. The euro maintained its position at $1.1657 as market participants await the upcoming German trade data and retail sales figures for the euro zone, scheduled for release later today. The British pound decreased by 0.1% to $1.3436, the Australian dollar remained unchanged at $0.6698, and the New Zealand dollar fell by 0.1% to $0.5749.