US Dollar Declines as Private Payrolls Fall Short of Expectations

One sentence summary – The recent decline of the US dollar against other major currencies is attributed to lower-than-expected growth of private payrolls in August, leading to speculation that the Federal Reserve may have ended its tightening cycle, while the euro has strengthened due to higher inflation in Germany and expectations for a rate hike by the European Central Bank have risen, and Australia has seen a decrease in inflation levels.

At a glance

  • The US dollar has declined, reaching a two-week low against the euro and other currencies.
  • The decrease is linked to lower-than-expected growth of private payrolls in August.
  • Speculation has arisen that the Federal Reserve may have ended its tightening cycle due to softening data.
  • US job openings hit a two and a half year low in July, suggesting a possible labor market slowdown.
  • Markets predict a 91% likelihood that the Federal Reserve will keep interest rates unchanged next month.

The details

The US dollar has recently seen a decline, hitting a two-week low against the euro and a collection of other currencies.

This decrease is linked to the lower-than-expected growth of private payrolls in August.

Throughout the week, softening data has sparked speculation that the Federal Reserve, the US central bank, may have ended its tightening cycle.

Analysts and investors have been keenly observing the jobs report for August, seeking further evidence of the labor market’s tightness.

However, the report showed that private payrolls only grew by 177,000 jobs, falling short of the anticipated growth of 195,000.

In addition, US job openings hit their lowest level in nearly two and a half years in July, suggesting a possible slowdown in the labor market.

Due to these disappointing figures, markets are now predicting a 91% likelihood that the Federal Reserve will keep interest rates unchanged next month.

This belief that the Fed has done enough to bolster the economy has contributed to the dollar’s decline.

The dollar index dropped by 0.54% to 102.97, while the greenback slipped by 0.09% to 145.735 Japanese yen.

Conversely, the euro experienced a bounce of 0.54% to $1.0938.

This boost in the single currency can be attributed to higher-than-expected inflation in Germany.

Furthermore, money markets have increased their bets on a September rate hike from the European Central Bank.

In related news, Australia saw a slowdown in inflation, hitting a 17-month low in July.

In summary, the recent weakness of the US dollar is due to the lower-than-expected growth of private payrolls in August.

With markets now expecting the Federal Reserve to maintain interest rates, the dollar has faced downward pressure against other major currencies.

At the same time, the euro has strengthened due to higher inflation in Germany, and expectations for a rate hike by the European Central Bank have risen.

On the other hand, Australia has seen a decrease in inflation levels.

Please be aware that all information provided in this news brief is based on multiple sources and aims to give a comprehensive overview of the current situation.

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cnbc.com
– The dollar dropped to a two-week low against the euro and a basket of currencies after U.S. private payrolls rose less than expected in August.
– Softening data this week has raised bets that the U.S. central bank has concluded its tightening cycle.
The jobs report for August will be closely watched for further confirmation of the labor market’s tightness.
The dollar’s fall is attributed to the belief that the Federal Reserve has done enough.
– Private payrolls rose by 177,000 jobs in August, lower than the forecasted increase of 195,000.
– U.S. job openings dropped to the lowest level in nearly 2-1/2 years in July.
– Markets now see a 91% chance of the Fed leaving rates unchanged next month.
The dollar index fell 0.54% to 102.97.
The greenback slipped 0.09% to 145.735 Japanese yen.
The euro bounced 0.54% to $1.0938.
The single currency was boosted by hotter than expected inflation in Germany.
– Money markets raised their bets on a September rate hike from the European Central Bank.
– Australian inflation slowed to a 17-month low in July.

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