US Dollar Continues to Weaken Post Jobs Report
FxPro Financial Services Ltd | Nov 06, 2023 05:41AM ET
US data came out so weak that the market could celebrate. The US labour market added 150k jobs in October after 297k (revised from 336k) and expected 180k.
The unemployment rate unexpectedly rose from 3.8% to 3.9% despite the share of the economically active population falling from 62.8% to 62.7%. Wage growth slowed from 4.3% to 4.1%, the lowest over two years.
It was the perfect report to confirm that America is slowing down enough to justify a halt in interest rate hikes while not feeling bad enough to say a recession is coming.
This report is the perfect combination for risk demand in the short term. The labour market continues to create jobs at the pace of a healthy economy. At the same time, wage growth is slowing, not accelerating. The rising unemployment rate reflects increased interest in finding a new job.
This combination has reinforced expectations that inflation is on the path to normalisation and that the central bank will not need to tighten policy again. It is only necessary to wait for the effect of the already implemented increases and not to press the pedal of monetary tightening extremely hard.
Reduced chances of further rate hikes in December played against the dollar. On Friday, the dollar index fell to its lowest level in six weeks. Friday's sharp decline sets us up to see a switch to a more classic correction pattern with a pullback to the 61.8% or 104 level from the initial rally from 99 to 107 after a month of staying within the 76.4% correction with support above 105.2.
Get The News You Want
The FxPro Analyst Team
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.