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Dollar Drops As Rate Worries Ebb After U.S. Jobs Data


The U.S. dollar fell against its major counterparts in the New York session on Friday, as U.S. jobs data showed that wage growth eased in December, in a sign that inflation may be fading amid the Federal Reserve’s monetary policy tightening.

Data from the Labor Department showed that non-farm payroll employment jumped by 223,000 jobs in December after surging by a revised 256,000 jobs in November.

Economists had expected employment to shoot up by 200,000 jobs compared to the addition of 263,000 jobs originally reported for the previous month.

The unemployment rate edged down to 3.5 percent in December from a revised 3.6 percent in November.

The unemployment rate was expected to come in unchanged compared to the 3.7 percent originally reported for the previous month.

Annual wage growth slowed to 4.6 percent in December from 4.8 percent in November.

Easing wage growth reduced worries over the Fed’s rate-hike trajectory.

Data from the Institute for Supply Management showed that U.S. service sector activity unexpectedly contracted in the month of December.

The ISM said its services PMI tumbled to 49.6 in December from 56.5 in November, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 55.0.

The greenback fell to 133.24 against the yen, from more than a 2-week high of 134.77 hit at 8 am ET. The pair had closed Thursday’s deals at 133.40. The greenback is seen finding support around the 117.00 mark.

The greenback dropped to 1.0545 against the euro, pulling away from more than a 4-week high of 1.0481 seen at 8:30 am ET. The pair was worth 1.0521 when it closed deals on Thursday. Next key support for the greenback is likely seen around the 1.09 level.

The greenback retreated to 1.1929 against the pound, following a 1-1/2-month high of 1.1841 set at 6:50 am ET. The pound-greenback pair had ended yesterday’s trading session at 1.1902. The greenback is likely to face support around the 1.23 region, if it falls again.

The greenback declined to 0.9345 against the franc, reversing from a fresh 4-week high of 0.9408 seen at 8:30 am ET. At yesterday’s trading close, the pair was quoted at 0.9356. The greenback is poised to challenge support around the 0.91 mark.

The greenback eased to 1.3522 against the loonie, from a 2-day high of 1.3663 it logged at 8:05 am ET. The greenback was trading at 1.3569 against the loonie at yesterday’s close. Should the greenback falls further, it is likely to test support around the 1.33 region.

The greenback pulled back to 0.6791 against the aussie, after rising to a 2-day high of 0.6723 at 8:05 am ET. The greenback was worth 0.6752 per aussie at Thursday’s New York session close. Further downtrend may take the greenback to a support around the 0.70 area.

The greenback moved down to 0.6262 against the kiwi, from more than a 5-week high of 0.6191 seen at 7:10 am ET. At Thursday’s close, the pair was valued at 0.6225. Continuation of the greenback’s downtrend may lead it to a support around the 0.66 region.

U.S. Services Index Unexpectedly Indicates Contraction In December

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