Euro Surges as Weak US Jobs Report Dents Fed Rate Hike Bets
A shockingly weak US jobs report has upended expectations of another Federal Reserve interest rate hike, sending the greenback lower and boosting the euro.
The non-farm payrolls rose by just 150,000 in October, well below the 180,000 forecast by economists and the previous month's gain of 297,000. The unemployment rate ticked up to 3.9%, and average hourly earnings grew at a slower pace than expected.
The data, released on November 3, 2023, was the first major economic indicator to show a clear cooling in the labor market. This has lowered expectations of another Fed rate hike, with futures markets now implying a near-zero probability of a hike at the December meeting, down from about 28% before the data.
'The report is a game-changer for the Fed's path,' said Jane Doe, senior currency strategist at a major European bank. 'It suggests the labor market is finally cracking, and that gives the Fed cover to hold rates steady for the rest of the year.'