USD steady ahead of this week’s inflation data
The US dollar remained steady on Monday morning after being shaken on Friday following the release of non-farm payrolls data.
Friday's figures showed that the US economy created 216,000 jobs in the last month of 2023, more than the 173,000 in November and higher that the 170,000 expected. Meanwhile, the unemployment rate remained at 3.7%, while average hourly earnings rose to 4.1% year-over-year. The next test for the dollar will be US consumer price index data on Thursday. IGTV’s Angela Barnes has this overview.
(AI Video Summary)
US dollar steadies following jobs data release
The US dollar had a bit of a bumpy ride after the release of the latest jobs report, but it has since settled down. The report showed that the US economy added 216,000 jobs in December 2023, which was better than expected. The unemployment rate remained steady, and wages actually increased more than economists predicted. This suggests that the Federal Reserve is unlikely to change interest rates in the near future. The anticipation for a rate cut in March has also decreased since the report came out. Now, the focus is on the upcoming release of consumer price index (CPI) data, which is expected to show a slight increase in prices. Overall, the US dollar is holding its own against other currencies, showing a small increase for the day.
CPI data could impact the US dollar
So, what does all of this mean? Essentially, the US economy is still growing and adding jobs, which is a good sign. The Federal Reserve, which is like the country's central bank, is in charge of setting interest rates. The strong jobs report suggests that they won't feel the need to cut rates anytime soon. This has made traders less certain that a rate cut will happen in March. Instead, they are now looking at the CPI data, which tells us about changes in prices. If the CPI data shows prices going up a bit, it could have an impact on the US dollar and how it performs against other currencies. But for now, the US dollar is doing alright and holding its ground.
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