- The US dollar decreases against all major currencies.
- Jolts Jobs for December Point for more cooling at the opening.
- The US dollar index (DXY) sees pressure at 108.00 for a lower holiday.
The US dollar index (DXY), which tracks the performance of the US dollar against six major currencies, is declining in an immediate reaction to the Jolts opening report in December. The actual number came in much less, at 7.6 million compared to the expected 8 million. It is clear that the labor market in the United States has started to see the low demand for the workforce, as the Jolts numbers began constantly a month for a month.
DXY trades about 108.00 at the time of writing this report. The markets also interact with a mixture of addresses with a scorch of Mexico and Canada, which witnessed the delay in the imposition of American definitions. Meanwhile, China has averages against US President Trump’s tariff by issuing its fees on goods imported from the United States. In addition to American geopolitical titles and data, two Federal Reserve speakers (FIRED), head of the Federal Reserve in Atlanta, Rafael Postc and Chairman of the Federal Reserve at San Francisco Marie Dali, may leave comments on markets to consider them.
Daily Digest Market Movers: Jolts is dramatically shrinking
- China announced on Tuesday a 15 % tax on less than $ 5 billion in US energy imports, such as coal and natural texture gas (LNG), 10 % fees on American oil and agricultural equipment, and anti -monopoly violations will also be achieved, Bloomberg reports. Meanwhile, Canada and Mexico sees a tariff from the United States delayed thanks to their behavior to comply with US President Donald Trump.
- Monthly manufacturer orders for December decrease to -0.9 %, less than an estimate -0.7 % and deeper than -0.4 % in the previous month.
- American Jolts job opportunities for December faced a greater decrease to 7.6 million slots, from 8 million expected, a decrease of 8.098 million in November.
- The Federal Reserve contains two speakers as well:
- The Federal Reserve Chairman in Atlanta Rafael Bustic runs a conversation with the mayor of Atlanta André Dickens at a meeting of the National Housing Crisis Team in Atlanta at 16:00 GMT.
- Mary Dali, head of the Federal Reserve in San Francisco, will participate in the annual Economic Expect Committee for the Ater.
- The shares are higher with the expectations of reducing other federal reserve rates that grow a touch after this report of severe job openings.
- The CME Fedwatch tool records an 86.5 % opportunity to maintain interest rates unchanged at the next meeting of the Federal Reserve Makers on March 19.
- The return in the United States is traded for 10 years about 4.555 %, up from its new annual level at 4.46 %, seen on Monday.
Technical analysis
The US dollar index (DXY) around the place, although it does not go anywhere. 107.00 range is defined on the negative side and 110.00 on the upper side. We expect to see the DXY preservation range between these two larger levels at the present time.
On the upward trend, the first barrier was exceeded in 109.30 (July 14, 2022, which is the high and high Trendline) for a short period, but it did not stand up on Monday. Once this level is recovered, the next level that must be hit before progressing at 110.79 (September 7, 2022, high) remains.
On the negative side, the simple moving average for 55 days (SMA) at 107.75 and 3 October 2023, a height of 107.35 is a double support for the DXY price. Currently, this appears to be the RSI indicator (RSI) still has room for the negative aspect. Thus, find 106.52 or even 105.89 as better levels.
US dollar index: daily chart
Common questions about employment
Labor market conditions are an essential element in assessing the health of the economy and thus the main driver to evaluate the currency. High labor, or low unemployment, has positive effects on consumer spending and thus economic growth, which enhances the value of the local currency. Moreover, the very narrow labor market – a situation in which there is a shortage of workers to fill open positions – can have effects on inflation levels, and therefore monetary policy leads to a decrease in employment and high demand to high wages.
The pace with salaries in the economy is the key to policy makers. High wage growth means that families have more money for spending, and usually lead to an increase in prices in consumer goods. Unlike the most volatile inflation sources such as energy prices, wages are seen as a major component in the basic and continuous inflation as it is unlikely to be removed from the increase in salaries. Central banks around the world pay close attention to wage growth data when making a decision on monetary policy.
The weight that each central bank is appointed to the conditions of the labor market depends on its goals. Some central banks explicitly have states related to the labor market, which exceeds inflation levels. The American Federal Reserve (Fed), for example, has a double mandate to enhance the maximum employment and stable prices. Meanwhile, the only mandate of the European Central Bank (ECB) is to maintain inflation under control. However, despite any mandates they have, the conditions of labor market are an important factor for policy makers given their importance as a criterion for the health of the economy and its direct relationship to inflation.
