USD rises before the November non-farm payrolls, more investors started to short Swedish krona as they short European growth

USD leaped against AUD and NZD on Friday, ahead of November non-farm payrolls data. Economists expect that 530k jobs have been added in the past month. After Powell’s hawkish comments, more Fed officials have joined him. San Francisco Fed President Mary Daly said that it might be the time to start thinking about raising rates to combat inflation. Investors are speculating that the latest job data could clear the path for the Fed to make such a decision. Meanwhile, Omicron continues to spread globally, leading to great volatility in stock markets worldwide. As of now, Omicron is already the dominant strain in South Africa.

More traders are now shorting the Swedish krona (SEK), which is the worst-performing currency in developed markets. With its decline of more than 10% YTD against USD, the performance is even worse than JPY. Some analysts comment that investors who short SEK are effectively shorting European growth prospects.