The dollar strengthens against the euro, yen and pound sterling in trading on Wednesday after a sharp decline the day before amid signals of a gradual decline in activity in the US economy.
Investors are waiting for data on the US labor market, which is expected to show a slowdown in job growth in the country. The consensus forecast of experts surveyed by Market Watch suggests that the number of jobs in September increased by 275 thousand (315 thousand in August), while maintaining unemployment at 3.7%.
The US Department of Labor will release the data on Friday at 3:30 p.m.
Another report from the Department of Labor, which was published on Tuesday, showed a sharp decrease in the number of open vacancies in the States in August. The indicator fell by 10% – the fastest pace since the start of the pandemic in 2020, to 10.1 million vacancies.
Weak statistics on the US economy are a good signal for risk appetite, as they speak in favor of a reduction in the trajectory of the Federal Reserve (Fed) rate hike, said Steven Innes, managing partner at SPI Asset Management.
Some “cooling” of the labor market will help ease inflation in the US and may reduce the need for further sharp tightening of monetary policy by the Fed, writes Dow Jones.
“If this trend continues, the Fed may back off somewhat in terms of rate hikes later this year and early next year,” said Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions.
The euro/dollar pair is trading at $0.9966 on Wednesday, compared to $0.9987 at the close of previous trading. The pound fell to $1.1435 from $1.1475 at the close of previous trading.
The US dollar against the yen is 144.25 yen against 144.14 yen the day before.
On Tuesday, the dollar lost 1.7% against the euro, 1.4% against the pound and 0.3% against the yen.
