The US dollar is mixed against several currency rivals to close out the trading week as a blend of strong February jobs data, the coronavirus, and financial market turmoil is causing widespread confusion. Will the greenback rebound or will it continue its fall?
According to the Bureau of Labor Statistics (BLS), the US economy added 273,000 jobs in February, up from 225,000 in January. The market had forecast 175,000 new jobs. The unemployment rate fell back down to a 50-year low of 3.5% last month.
Job gains were seen across the board: health care (57,000), restaurants and bars (53,000), federal government (45,000), construction (42,000), and manufacturing (15,000).
The average hourly wage rose nine cents to $28.52 per hour in February, reducing the 12-month rate from 3.1% to 3%. While wages appear to have hit a 3% ceiling, experts note that employers have offered a wide range of benefits and perks to attract and retain talent.
Employment gains for January and December were revised upward. The government raised the December gains from 145,000 to 184,000 and Januaryâs increase climbed from 225,000 to 273,000.
This is an incredible labor update in the middle of the coronavirus crisis, but the real test will be the March jobs report since Covid-19 is now prevalent in the US. With some of the biggest companies in the world across multiple sectors reporting steep losses, it will be seen if the US labor market can endure the outbreak that has now infected more than 100 Americans and killed about a dozen.
In other data, the federal trade deficit tumbled 6.7% in January to $45.3 billion. Imports plunged 1.6% to $253.9 billion and exports declined 0.4% to $208.6 billion. Most analysts expect the coronavirus will have a greater impact on Americaâs February and March trade data.
But the positive numbers were not enough to lift the US Dollar Index, a measurement of the greenback against a basket of currencies, to finish the trading week. The index cratered 0.83% to 96.02, from an opening of 96.61, as the dollar is on track for a 2.2% weekly loss.
In early trading, the US stock market was poised another day of major losses, so the strong data may not be enough to limit the damage.
The USD/CAD currency pair rose 0.04% to 1.3418, from an opening of 1.3414, at 12:48 GMT on Friday. The EUR/USD surged 0.72% to 1.1315, from an opening of 1.1237.
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