US Dollar drops as unemployment rate rises
After the US economy added more jobs than anticipated in August, the US dollar (USD) declined versus the euro and the Japanese yen on Friday. However, a rise in the unemployment rate to 3.8% and a slowdown in wage growth signaled that the state of the labor market was getting worse.
In August, employers created 187,000 more jobs than anticipated, an increase of 170,000 positions. Over the projected 3.5%, the jobless rate increased to 3.8%. Average hourly wages rose by 4.3% during the course of the year, contrary to predictions of a 4.4% growth.
The 187,000 employment increases that had been originally reported for July have been replaced with 157,000 as a result of a downward revision to the numbers.
The best of all worlds may be available to investors in today’s jobs data. Michael Arone, chief financial strategist at State Street Global Advisors, a Boston-based firm, claims that “it’s the labor market softening just enough to keep the Fed at bay while remaining strong enough to prevent an economic recession.”
The dollar index was recently trading at 103.42, down 0.18%. To reach $1.0862, the euro climbed by 0.18%. Its lowest point since August 11 was reached when the dollar dropped 0.56% to 144.725 Japanese yen.
With just a 35% possibility of a rate rise, traders of Fed funds futures are presently pricing in a 93% chance that the Federal Reserve will keep interest rates unchanged at its September meeting, according to the CME Group’s FedWatch Tool.
