the dollar went up this wednesday april 5th and recovered from the two-month lows reached in the previous session.
However, the underlying trend of the dollar remains bearish, and US private sector employment figures on Wednesday confirmed this. The data supported the view that the Federal Reserve may not need to raise rates much further.
The dollar index rose 0.4% to 101.87, boosted by gains against the euro, which fell 0.5% to $1.0906.
The ADP national employment report showed that American private employers hired far fewer workers than expected in March, which suggests a cooling of the labor market. Private employment increased by 145,000 jobs last month. Economists polled by Reuters had forecast an increase in private employment of 200,000 jobs.
The data came on the heels of Tuesday’s report showing a decline in job offers in February and an increase in layoffs.
Another report released on Wednesday also pointed to continued economic weakness, this time in the services sector, which slowed more than expected in March as demand cooled, while a measure of prices paid by utilities fell to its lowest. lowest level in almost three years.
The ISM non-manufacturing index fell to 51.2 last month from 55.1 in February, while the prices paid component fell to 59.5 from 65.6 in February, with the service sector employment indicator falling. also at 45.8 from 47.6 in February.
“People are realizing that the (economic data) strength we saw in January was just a blink. It wasn’t a trend,” said Thierry Wizman, global strategist for rates and currencies at Macquarie in New York.
“Yes, inflation is still high, but there is a lot of evidence going on that disinflation is the underlying trend…and part of the basis for why the Fed is sounding ambiguous these days.”
Cleveland Federal Reserve Bank President Loretta Mester said in an interview with Bloomberg TV on Wednesday that it was too early to tell whether the central bank would have to raise the benchmark rate at its next policy meeting in early May.
The dollar registered its third daily loss against the Japanese yen, with a fall of 0.4% 131.15 units.
Source: Ambito
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