The US dollar weakened against its main competitors after the release of the ADP non-farm payroll report for January, which reported that job growth for the month of January had exceeded expectations. The greenback was also affected by lower-than-expected figures reported for growth in average hourly earnings.
The US dollar lost significant ground against the euro and the Japanese yen, while it gained ground against the British pound. The US dollar index, which tracks the greenback’s performance, hit a daily low of 99.56 and was trading at 99.62, at the time of writing.
The US dollar weakened despite higher job creation which was reported at over 246,000 new jobs in January, versus the expected figure of 175,000 jobs. The average hourly earnings were recorded at a mere 0.1% growth rate instead of the expected 0.3%. The unemployment and underemployment figures were reported at 4.8% and 9.4% respectively, which was higher than expected.
The US dollar was also affected by the release of the US ISM non-manufacturing PMI, which reported that the NMI for January was 56.5, which was lower than December’s 56.6, and did not meet expectations. Yesterday’s dovish Fed report is also affecting the greenback negatively.
Currently, the strength of the US dollar is inextricably linked to US politics as Donald Trump‘s actions have proven to be a major driver of market sentiment towards the greenback.
The EUR/USD was trading at 1.0786 as at 17:25 GMT having tested lows of 1.0711 earlier in the day. The USD/JPY was trading at 112.54 having tested highs of 113.48 earlier today.
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