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Wednesday, March 22, 2023

The super dollar fell after data suggesting a slowdown in US inflation

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The super dollar weakened on Friday after data from the US jobless report for February showed inflation pressures were easing, sending Treasury yields lower and undermining some of the recent strength of the dollar. US currency.

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The US economy added jobs at a solid pace last month, likely ensuring the Federal Reserve hikes rates for longer, as expected. But the cooling of wage inflation reduced the probability of a 50 basis point rate hike in March.

The dollar fell against all major currencies but was virtually unchanged against the Canadian dollar. Against a basket of currencies, the dollar index was down 0.618.

The yield on the benchmark 10-year Treasury note fell more than 22 basis points to less than 3.70% in the biggest single-day drop in four months.

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Adding to the fall in Treasury yields was the closure of SVB Financial Group, the biggest bank failure since the financial crisis.as California regulators moved quickly to protect depositors at the startup-focused bank.

“In my opinion, there is a significant safe haven offering going on,” said Kevin Flanagan, WisdomTree’s head of fixed income strategy. “There are concerns about potential banking stress.”

Average hourly earnings rose 0.2% from 0.3% in January, to bring the year-on-year increase to 4.6%, Friday’s jobs report showed. Economists expected a rise of 0.3% in February, which had brought the figure to 4.7% annually.

Source: Ambito

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