Dollar (USD) falls after unfavourable US labour market data

dollar, falls, usa

The US Dollar is weakening today following the negative US labour market data. The euro gained about 0.3 percent against the dollar to $1.0850 around 18:45 CET.

Job openings shortage

The U.S. Labor Department reported that the supply of job openings in the country fell by 338,000 to 8.827 million in July. It hit the lowest level since March 2021, Reuters reported.

According to analyst Ben Jeffery of BMO Capital Markets, the decline is due to “the increasingly obvious lagged impact of higher interest rates.” Meanwhile, the dollar has recently been supported by expectations that the US economy’s resilience to higher interest rates could prompt the US Federal Reserve (Fed) to tighten monetary policy further.

Raising interests

The Fed began raising interest rates last year in an attempt to bring inflation under control. Fed chief Jerome Powell said last week that further interest rate hikes may be needed to tame inflation, but he also said the central bank would proceed cautiously in its decision-making.

Investors are now awaiting the U.S. government’s report on August job creation and the unemployment rate, which will be released on Friday. Attention is also turning to the report on August inflation in the euro area, which will be published by Eurostat on Thursday.

Source: ČTK


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