U.S. employment data was strong in December, but wage growth slowed, while service sector activity fell into contraction territory for the first time in more than two years, and the data helped reinforce expectations that the Federal Reserve will raise interest rates by just one yard next month , The U.S. dollar index fell by more than 1% on Friday (6th), but it still closed higher in the first week of this year. Non-US currencies rebounded collectively.
In late New York trade, the ICE U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, was down 1.08% at 103.90, up 0.4% for the week.
The United States added 223,000 non-agricultural jobs in December, higher than economists’ forecast of 200,000, and last month’s wage growth slowed slightly from November, with the monthly growth rate falling from 0.4% to 0.3%, and the annual growth rate from 4.8% % slowed to 4.6%.
Mazen Issa, senior foreign exchange analyst at TD Securities, said that the slowdown in wage growth is encouraging, but there are also hawkish factors in this data, that is, an unexpected decline in the unemployment rate and an unexpected increase in the labor participation rate. Still size 2 doesn’t help.
On the same day, the United States announced that the ISM non-manufacturing index fell into the shrinking range in December, falling sharply from 56.5 in November to 49.6. This is the first time since May 2020 that it has fallen below the 50-point threshold for prosperity, indicating that it accounts for more than two-thirds of the US economy. The industry is shrinking, and U.S. factory orders fell more than expected in November.
Atlanta Federal Reserve Bank President Raphael Bostic said on Friday that the latest employment data is another sign that the U.S. economy is gradually slowing, and that if the situation persists, the Fed could reduce interest rate hikes to 1 yard at the next meeting .
Richmond Federal Reserve Bank President Barkin (Thomas Barkin) also believes that the Fed will raise interest rates by a smaller margin, will help limit the damage to the economy.
After the release of the economic data, fed funds futures traders increased their bets that the Fed would raise interest rates by one point at the end of the next meeting. down to 27%.
Next, investors’ focus will turn to the US Consumer Price Index (CPI) report for December next Thursday (12th). The market expects overall inflation growth to remain unchanged, and the core CPI is estimated to increase by 0.3% on a monthly basis.
As the U.S. dollar fell, the euro rebounded nearly 1.2% to $1.0644, recovering yesterday’s decline, and the single-day increase was the largest since November 11, but it still fell 0.5% this week; the pound also rose 1.6% to $1.2097, the weekly The line is flat.
Commodity currencies also climbed strongly, with the Australian dollar and New Zealand dollar both up 1.9%. Among them, the Australian dollar closed up nearly 1% this week, and the New Zealand dollar was flat for the week.
The dollar fell 1 percent against the yen to 132.07 yen, still up 0.7 percent for the week.
As of Saturday (7th) around 6:00 Taiwan time Price:
The dollar index was at 103.9020. -1.1655% The euro was trading at 1.0644 dollars to the euro. +1.1691% GBP/USD was trading at $1.2097. +1.5872% The Australian dollar is trading at 0.6880 US dollar to the US dollar (AUD/USD). +1.8957% The U.S. dollar was trading at 1.3443 Canadian dollars to the U.S. dollar. -0.9213% The U.S. dollar was trading at 132.05 yen per dollar. -1.0194%