The super dollar is trading at a loss This Friday March 10 after better-than-expected US non-farm payroll data was released showed that inflationary pressures were easing, causing Treasury yields to fall and undermining some of the recent strength of the US currency. This in a context of falling world markets after the collapse of the Silicon Valley Bank while the yen weakened after the Bank of Japan to keep monetary stimulus unchanged.
The dollar index lost 1% to 104.215.
Average hourly earnings increased 0.2% from 0.3% in January, to bring the year-on-year increase to 4.6%. Economists expected a rise of 0.3% in February, which had brought the figure to 4.7% annually.
“It suggests that wage pressures are not accelerating,” said Andrzej Skiba, head of BlueBay’s US Fixed Income team at RBC Global Asset Management.
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Meanwhile the euro is up 0.51% at $1.0634. The pound sterling traded at $1.2037, an advance of 0.94%. Also, the and in it strengthened 0.07% to 136.06 units per dollar.
The US economy added jobs at a solid pace last monthOr, which is likely to ensure that the Fed raises rates for longer, as expected. But the cooling of wage inflation reduced the probability of a 50 basis point rate hike in March.
Nonfarm payrolls increased by 311,000 last month, the Labor Department report showed on Friday. Data for January was revised down to show 504,000 jobs added instead of the previously reported 517,000.
Economists polled by Reuters had forecast job growth of 205,000. They say the economy needs to create 100,000 jobs a month to keep up with the growth of the working-age population.
US Treasury yields fall on Fridayafter economic data showed that the labor market added more jobs than expected in February, while investors remained attentive to the banking sector, whose shares remained under pressure.
The yield on the benchmark 10-year bond was down 10.3 basis points to 3.820%.
Expectations of a further rate hike by the Fed in its March 22 policy announcement eased after the jobs data, and fed funds futures now project a 44.7% chance of a 50 basis point rise, up from 68.3% on Thursday, according to CME’s FedWatch tool.
The yield on two-year noteswhich tends to move in step with rate expectations, yields 16 basis points, at 4.740%.
Returns fell on Thursdaypartly due to concerns about the banking sector, and stocks of SVB Financial fell sharply on Friday, before trading was halted pending news.
The 30-year paper yield subtracted 5.6 basis points, to 3.814%.
A closely watched part of the yield curve, which measures the gap between the yield on two-year and 10-year bonds, seen as an indicator of economic expectations, stood at -92.4 basis points.
Source: Ambito
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