The US dollar rose against the euro and the Japanese yen on Tuesday as employers in the United States looked for more workers than expected in July. However, the greenback was weaker against the British pound as strong inflation data in the United Kingdom supported the cable.
US job openings hit a new record as companies continued to have strong demand for new jobs, despite the lowest unemployment rate in years. The Department of Labor reported today that job openings increased to 6.17 million in July from 6.12 million in June, which opposed estimates of a drop to 5.96 million.
Job openings in July were the highest in record, following a steady rebound from the bottom that was reached in July 2009, when available positions dropped to 2.19 million. The report added that the number of hires was little changed at 5.5 million in July, as 9,000 positions were filled in the federal government.
Firms continue to have a harder time finding workers that have the skills needed for available positions since the labor market neared full employment. The tighter job market limited layoffs in July as firms worked on keeping their staff by offering higher wages and seeking more training.
Gains for an index that tracks the strength of the greenback were limited by a drop against the British pound, which benefited from strong UK inflation. Core consumer prices rose to 2.7% in August to exceed analyst expectations of a 2.5% reading.
The US dollar may gain more traction tomorrow with the release of producer prices data, which is forecasted to show a 0.2% gain last month following a 0.1% a month before. The data will be followed by a fresh reading for the consumer price index on Thursday, which may reveal stronger inflation in the United States.
Stronger inflation will likely support the Federal Reserveâs case for tighter monetary policy. The central bankâs monetary policy committee is scheduled to meet on September 19 to decide interest rates.
The CME FedWatch tool shows that investors are almost certain that the committee will keep rates unchanged. However, the press release that will follow the decision may hint a third interest rate hike before the year comes to an end.
EUR/USD traded at 1.1966 as of 16:15 GMT on Tuesday after dropping to 1.1927 at 11:00 GMT, the pairâs lowest level since September 7. EUR/USD began trading today at 1.1958. GBP/USD climbed to 1.3272 after starting the day at 1.3168. The pairâs highest level today was 1.3287 at 10:40 GMT.
The Dollar Index, which tracks the performance of the US currency against a basket of its major peers, rose to 91.89 as of 16:13 GMT today, the highest level since September 6, from 91.87 yesterday.
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