U.S. dollar retreats from 20-year high on mixed U.S. jobs report

The dollar eased from a 20-year high on Friday after data showed the pace of U.S. hiring rose more than expected last month, but wage growth moderated and unemployment rose, giving the US Federal Reserve some leeway when it raises interest rates later this month.

The U.S. economy added 315,000 jobs last month, the data showed, beating the consensus forecast of 300,000 jobs by economists polled by Reuters and marking the 20th straight month of job growth.

The dollar index, which tracks the currency against six peers, zigzagged following the report, in tight trade ahead of the Labor Day long weekend in the United States.

Photo: EPA-EFE

The US currency was down 0.07% at 109.61, but was still up 0.74% for the week for its third consecutive weekly gain.

The greenback rose NT$0.057 to close at NT$30.588, its highest level against the New Taiwan Dollar in 34 months. On October 21, 2019, the NT dollar was at NT$30.611 against the US dollar.

“The non-farm payrolls being mixed was an excuse to post profits in the dollar soaring to 20-year highs,” said Joe Manimbo, senior market analyst at Convera.

The U.S. currency jumped to its highest level since June 2002 on Thursday, 109.99, and has been soaring since Fed Chairman Jerome Powell said at the Jackson Hole, Wyoming symposium on August 26, that rates should be high “for a while”. to combat stubbornly high inflation.

“Overall, what we’re seeing is that the market is still bracing for potentially much more aggressive tightening from the Fed,” said Edward Moya, senior market analyst at Oanda.

Fed funds futures were flat after the jobs report and price a 75% chance the Fed will raise rates by 75 basis points this month, according to data from Refinitiv.

The euro rose 0.21%, retracing some of the previous day’s losses against the dollar, but standing below par at US$0.9965.

The European Central Bank is due to meet next week, with money markets betting on an unprecedented 75 basis point hike.

The pound fell 0.24% against the dollar to $1.1516, on track to end the week down around 1.9%. Britain’s new Prime Minister is due to be announced tomorrow, at the end of the ruling Conservative Party leadership race, which could lead to further pound movements.

Against the rate-sensitive yen, the dollar gained 0.04% to ¥140.125.

The dollar jumped above ¥140 for the first time since 1998 on Thursday.

The Japanese government should take “appropriate” measures as needed, Japanese Finance Minister Shunichi Suzuki said on Friday.

Additional reporting by staff reporter, with CNA

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