Dollar weakens after lower-than-expected jobless claims data
2023.03.09 12:15
Dollar weakens after lower-than-expected jobless claims data
By Ray Johnson
Budrigannews.com – The dollar plunged on Thursday after information showed that U.S. jobless cases rose more than anticipated last week, raising expectations that a conditioning work market will lessen the probability of the Central bank reaccelerating the speed of its rate climbs.
For the week ending March 4, initial claims for state unemployment benefits increased by 21,000 to a seasonally adjusted 211,000. Business analysts surveyed by Reuters had conjecture 195,000 cases for the most recent week.
It comes before the highly anticipated February jobs report on Friday, which may decide whether the Fed will increase the rate of increase to 50 basis points at its meeting on March 21 and 22.
Edward Moya, a senior market analyst at OANDA in New York, stated, “A lot of traders are breathing a sigh of relief that we’re starting to see some softness in the labor market.” The concern is that the rising expectations of a half-point rate increase will be reinforced if we receive a strong payrolls report tomorrow.
At 105.29, the dollar was down 0.30 percent against a basket of currencies. It has fallen from Wednesday’s three-month high of 105.88. The euro rose 0.25 percent to $1.0570, up from a two-month low on Wednesday of $1.0524.
Wednesday, Fed Chair Jerome Powell reiterated his Tuesday testimony to Congress regarding higher and possibly faster interest rate hikes. However, Powell emphasized that the debate was still ongoing and that a decision was contingent on data that would be released prior to the March meeting.
Before Powell’s remarks early on Tuesday, traders in Fed funds futures are now pricing in a 66% likelihood that the Fed will raise rates by 50 basis points, up from around 22%.
Employers are expected to add 205,000 jobs in February, well below the much larger-than-expected 517,000 gains in January, according to Friday’s data. Monthly wage growth is anticipated to be 0.3 percent, while annual wage growth is anticipated to be 4.7 percent.
Tuesday’s consumer price inflation data will also play a significant role in the Fed’s decision. It is anticipated that it will show that prices increased by 0.4% in February.
The yen gained before the Bank of Japan’s meeting with governor Haruhiko Kuroda on Friday.
This year, the Japanese central bank is not expected to make any significant changes to its long-term yield control policy.
To 136.23 yen, the dollar lost 0.84 percent against the Japanese yen. On Wednesday, it reached a three-month high of 137.90.
