The US currency fell again following worse-than-expected US employment data.
He global dollar fell on Wednesday to a more than one-year low against the euro and the pound sterling after data showed employers added 818,000 fewer jobs in the year to March than previously expected, while the currency rose again in Uruguay.
He dollar index fell 0.33% to 101.03, its lowest level since December 28, while the euro rose 0.27% to $1.116, its highest level since July 2023. The euro’s strength could be limited after the recent rally, he said. Vassili Serebriakov, from UBS.
“We haven’t seen a big move in US rates. I don’t think the European data is particularly positive for the euro. So it still looks like a bit of a technical move in the currency market,” he said.
Meanwhile, the pound sterling strengthened 0.59% to $1.3101, also the highest level since July 2023. In addition, the dollar weakened 0.34% to $144.74 Japanese yen, its lowest level since August 7.
US employment data
The data on a smaller-than-expected increase in July employment comes ahead of a highly anticipated speech by the Federal Reserve chairman, Jerome Powell, at the economic symposium of Jackson Hole from the Kansas City Fed on Friday.
“This probably lends more weight to Powell’s appearance at Jackson Hole,” Serebriakov said, adding: “It suggests that the labor market was not as strong as the Fed believed at the time and has been communicating. But it is less clear what that means for the outlook going forward.”
The markets are seeking clarity on the likely size of the rate cut at the Fed’s September 17-18 meeting, and whether borrowing costs are likely to decline at each subsequent Fed meeting.
Meanwhile, they remain highly sensitive to employment data for further signs that the economy is worsening at a faster pace.
Source: Ambito
