Today, US dollar index again updated the lows in the last seven months, almost reaching the level of 96.50. Data of the labor market, on which high hopes were placed, surprisingly didn’t meet expectations, showing ambiguous results.
Unemployment fell buy a forecast of 4.3%. The number of new jobs created outside the agricultural sector was only 138 thousand, which is almost 50 thousand less than the forecasts. However, NFP is still within acceptable limits. Perhaps the reason for the weakening was a slowdown in wage growth, which fell to 2.5%, but the indicator also shows acceptable results.
The main reason for the decline of the US dollar is the sentiments in the market, which shows that the Federal Reserve’s forecast for raising interest rates this month has receded from 100%, and hopes for two more tightening in the future are less than 50%.
Therefore, even if the Fed raises interest rates next week, without hawkish rhetoric and forecasts concerning the growth of US economic, the US dollar’s reaction may be negative after the meeting of the Federal Open Market Committee.