Dollar Weakens as Weak Jobs Report Underwhelms Investors
The US Dollar weakened against several major currencies on Friday after September's jobs report underwhelmed investors' expectations. The release showed that employers added just 29,000 jobs in September, compared to a consensus forecast of 90,000.
This news led ING's chief international economist James Knightley to question whether the Federal Reserve will raise interest rates again this month. According to Knightley, 'the Fed leadership is clearly leaning in the direction of an October hold,' which would mean that the next rate hike may not occur until December.
The weak jobs report was accompanied by a slowdown in annual wage growth to 3%, as well as a rise in unemployment to 4.2%. Knightley pointed out that these numbers suggest 'no inflation threat coming from the jobs market' and reinforce his view that investors are expecting too much monetary tightening.
The Pound, Euro, Australian Dollar, and New Zealand Dollar all gained against the US Dollar following the release of the jobs report. However, Canada's currency, USD/CAD, was an exception, remaining marginally higher despite retreating after the announcement.