The provided information discusses the movement of the US Dollar (USD) against the euro and Japanese yen in response to the August jobs report in the United States.
US Dollar’s Decline: The US Dollar (USD) weakened against both the euro and Japanese yen on the mentioned Friday.
August Jobs Report: In August, the US economy added 187,000 jobs, surpassing expectations of a 170,000 job gain. However, the unemployment rate increased to 3.8%, which was higher than the anticipated rate of 3.5%. Average hourly earnings also rose by 4.3% for the year, slightly below the expected 4.4% gain.
Revised July Data: The data for July was revised lower, indicating that 157,000 jobs were added instead of the initially reported 187,000.
Investor Reaction: Investors and analysts interpreted the jobs report as a mixed signal. Some saw it as evidence of the labor market softening just enough to keep the Federal Reserve from raising interest rates too quickly, while still being strong enough to prevent an economic recession.
Currency Movement: As a result of the report, the US Dollar Index fell by 0.18% to 103.42. The euro strengthened by 0.18% to $1.0862, while the US Dollar weakened by 0.56% against the Japanese yen, reaching as low as 144.44, the lowest level since August 11.
Federal Reserve Expectations: Traders in the Fed funds futures market were now pricing in a 93% likelihood that the Federal Reserve would keep interest rates unchanged at its September meeting. There was only a 35% chance of a rate hike in November, according to the CME Group’s FedWatch Tool.
This information provides insight into how economic data, particularly job reports, can impact currency markets and influence expectations about central bank policy, such as the Federal Reserve’s decisions on interest rates. It shows how financial markets respond to economic indicators and adjust currency values accordingly.
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