The US dollar slumped after the release of US non-farm payrolls as the employment report turned out to be really terrible, clouding the outlook for timing of monetary tightening from the Federal Reserve. It is important to note that the currency is trying to fight back and is rising right now.
Non-farm payrolls grew by 142,000 in September, nowhere near the predicted rate of growth of 201,000. What is more, the previous month’s increase was revised from 173,000 to 136,000. It was the worst two-month period in over a year. And bad news did not end there as average hourly earnings did not growth while economists were counting on an increase by at least 0.2 percent.
The abysmal data makes it unlikely for the Fed to start monetary tightening this year. CME FedWatch shows just 30 percent probability of an interest rate hike in December and a meager 5 percent in October.
EUR/USD was up from 1.1193 to 1.1234 as of 17:04 GMT today after touching the high of 1.1318 intraday. GBP/USD climbed from 1.5129 to 1.5200, and its daily high was at 1.5237. USD/JPY ticked down from the opening level of 119.91 to 119.85 but bounced from the session minimum of 118.67.
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