The US dollar dipped after the released of worse-than-expected nonfarm payrolls but reversed its losses quickly, bouncing against the euro. The greenback also gained on some other most-traded rivals, though not all of them.
The employment report demonstrated slower-than-expected growth in August, which were surprising considering that the private data released earlier this week surprised to the upside. Moreover, the previous month’s increase was revised lower. Some analysts said, though, that the worst part of the report was the slowing wage inflation.
Most other US reports released over the current session were not good either. The only exception was the manufacturing indicator from the Institute for Supply Management, which showed that already robust growth of the manufacturing sector accelerated last month.
So, why the dollar, which initially reacted to the news in a logical manner, is defying expectations right now, holding its ground against many majors? Market experts speculated that the reason for the weird behavior was anticipation of an interest rate hike from the Federal Reserve as traders did not consider the data to be bad enough to deter the Fed from monetary tightening. CME FedWatch showed about 43% probability of a hike in December and more than 50% by June.
EUR/USD was up from 1.1908 to 1.1979 intraday before retreating to 1.1858 as of 16:40 GMT today. USD/JPY was at 110.05 after opening at 109.96. GBP/USD edged up from 1.2929 to 1.2968.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.
