5 April 2024 | FXGT.com
US Dollar Rallies as Job Growth Outperforms Expectations
- Surprising Jobs Increase: The US economy exceeded expectations by adding 303,000 jobs last month, surpassing the forecasted 200,000 and marking the most significant increase in 10 months. This demonstrates the labour market’s continued resilience.
- EURUSD Dips Below $1.08: The euro experienced a downturn, moving below the $1.08 mark in the aftermath of the strong US labour market figures. The strong job growth has provided a boost to the dollar, challenging earlier expectations of imminent interest rate cuts by the Federal Reserve.
- Unemployment and Wage Growth: The unemployment rate dropped to 3.8% from a two-year peak, coupled with persistent wage growth, painting a picture of a healthy and expanding labour market.
- Fed’s Rate Cut Outlook: The solid job growth and healthy wage increases suggest the Federal Reserve may adopt a cautious approach to interest rate reductions, prioritizing inflation control over stimulating growth.
- June Rate Cut Probabilities Diminish: In response to the latest labour market data, the CME FedWatch tool now reflects a downward adjustment in market expectations, with the probability of a June rate cut decreasing to 55%.
- Focus turns to CPI Data: Attention now shifts towards the upcoming U.S. CPI inflation data for March, scheduled to be released on Wednesday, which will play a crucial role in shaping Federal Reserve rate cut forecasts.
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