Statistics on the US labor market may halt the growth of the dollar

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Published a block of data on the US labor market – the figures were moderately negative. Employment outside agricultural sector in April increased by 164 thousand (the forecast of 192 million), higher average hourly wages also came in below expectations, at 0.1% against a forecast 0.2%. The unemployment rate fell to 3.9% (the forecast 4%), the lowest level since December 2000.
But the unemployment rate is a secondary indicator, so investors reacted negatively to the data. Weak figures on employment and wages reduce the likelihood that the fed will decide on three interest rate hikes this year. In a press release on the results of the previous fed meeting on may 2 there is no hint of concern about the slowdown in GDP and jobs. Likely, the fed will raise rates at next meeting, on 13 June, but the wording can become more careful.
Published statistics on the U.S. labor market has caused increased volatility in the currency market. The EUR/USD rate at the time grew 0.3% to the level of 1.2, but then retreated slightly down. In parallel, the demand for US Treausres. Weak statistics on the labor market may halt the growth of the dollar and the yields of us government bonds.
The rest of the day is expected to have two representatives of the fed –William Dudley, and John Williams, investors will be closely watching their rhetoric, as well as the results of negotiations between US Treasury Secretary Stephen Mnuchin in China on the question of trade duties.
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Roman Tkachuk,
Senior analyst,
Alpari