The U.S. dollar fell against the euro, yen and pound sterling on Monday as fresh signs of a slowdown in U.S. inflation boosted traders’ hopes that the Federal Reserve will be able to halt the cycle of interest rate hikes earlier than expected.
The ICE-calculated index, which shows the dynamics of the dollar against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona), loses 0.29% during trading, the broader WSJ Dollar Index – 0.39%.
As of 7:55 a.m. Monday, the EUR/USD pair is trading at $1.0684, compared to $1.0644 at the close of the previous session.
The value of the American currency against the yen fell to 131.83 yen compared to 132.11 yen in the previous trade.
The pound to dollar rose to $1.2152 against $1.2093 on Friday.
Stats on the US labor market, released last Friday, showed the smallest increase in the number of jobs in the US economy in December since December 2020 – by 223 thousand. Unemployment in the States decreased to 3.5% from 3.6% in November.
At the same time, the average hourly wages in the private sector in December increased by 0.3% compared to the previous month and by 4.6% in annual terms. The growth rate slowed from 0.4% and 4.8% respectively in November and was weaker than analysts’ expectations (0.4% and 5%).
A member of the Board of Governors of the Federal Reserve, Lisa Cook, however, is not too optimistic about the prospects for a slowdown in inflation, according to Market Watch.
“Despite a number of encouraging signals we’ve seen recently, inflation remains excessively high, and that’s a serious concern,” she said during a speech last Friday at the American Economic Association event in New Orleans.
At the same event, the President of the Federal Reserve Bank of Atlanta, Rafael Bostic, said that he sees the need to raise the Fed rate to 5.25%.
“We still have a lot of work to do,” Bostick said.
In December, the American Central Bank increased the interest rate by 50 basis points to 4.25-4.5%
