The super dollar sank to a two-month low on weak US economic data

The dollar touched two-month lows on Tuesday, April 4, in volatile operations, after another round of weak economic data that bolstered bets that the Federal Reserve is about to finish its cycle of monetary tighteningeven as other central banks continue to raise rates to break the lingering high inflation.

In afternoon trade, the dollar index fell to a two-month low of 101.45 and was down 0.4% at 101.58.

Sterling hit a new 10-month high against the dollar, while the euro hit its highest level since February.

Data on US job offers in February, which fell to their lowest level in almost two yearsand the continued decline in factory orders weakened the dollar, as data indicated that rate hikes may be coming to an end.

Job vacancies, a measure of the demand for labor, fell by 632,000 to 9.9 million in February, the lowest level since May 2021.according to the monthly Job Openings and Labor Turnover Survey, or JOLTS.

“The main trigger was the JOLTS data, which is starting to point to the labor market moderating. So we have this kind of grind to the downside in the dollar and we’re also looking at yields,” said Vassili Serebriakov, strategist exchange of UBS in New York.

“The question is: is the dollar hurt more by falling yields or weaker equities in a risk-off environment? Yields seem to have a bigger impact.” added.

Two-year US Treasury yields, which tend to reflect interest rate expectations, fell 12 basis points (bps) to 3.86% on Tuesday.

In March, two-year yields fell almost 74bp, the worst monthly drop since January 2008, at the height of the global financial crisis.

US factory orders also fell for the second month in a row, down 0.7% in February after falling 2.1% in January.

“We have a lot of data to chew on this week, which will show that the US economy is resilient enough to withstand the Fed’s current rate hike mentality, or if markets take a breather.”said Juan Pérez, director of operations for Monex USA in Washington.