The US dollar plunged to a one-week low against a basket of world currencies in response to a fall in private sector employment. Unless the trend reverses by the end of the week, the dollar will experience its biggest seven-day decline since November 2020.
The dollar weakened 0.3 percent against a basket of currencies in which the euro has the biggest weight. Behind the not-so-anticipated downturn is unfavorable data from the US labor market. Indeed, private sector employment fell by 301k in January, with economists approached by Reuters estimating that it would go just 207,000 who lost their jobs in January.
In contrast, the euro has come from its weakest level against the dollar in nearly six months. Indeed, speculation is growing that the European Central Bank could crack down on ever-rising eurozone inflation anytime soon.
But the British pound grew stronger against both the dollar and the euro, up 0.36 percent. Indeed, investors expect the Bank of England’s central bank to decide on a further interest rate hike on Thursday. Economists’ consensus is that rates will rise by half a percentage point. It would be the second “hike” since the outbreak of the coronavirus pandemic.