The US dollar is strengthening against a basket of currencies today. It was helped by the US employment report, which showed that the labour market is resilient. Currencies considered safe in times of uncertainty, such as the Japanese yen and Swiss franc, are also rising in response to reports that Iran is preparing to attack Israel with a ballistic missile.
Dollar Strengthens, Euro Weakens
Around 17:40 CET, the dollar index, which tracks the dollar’s performance against a basket of six leading global currencies, rose 0.5 percent to 101.28 points. The euro weakened 0.6 percent against the dollar to $1.1068. The dollar was almost unchanged against the yen, hovering around JPY143.63. The euro lost 0.5 percent against the yen to JPY159.06.
Middle East Conflict Risks
“The market has largely ignored the Middle East conflict for the past month, but the direct confrontation between Iran and Israel brings the risk of uncontrollable developments,” ForexLive strategist Adam Button said.
Today’s report showed that US job openings unexpectedly increased in August after two monthly declines. However, job hiring was moderate and matched the slowing labor market. The US manufacturing sector held at a weaker level in September, but new orders improved and prices paid for inputs fell to their lowest level in nine months, which, together with falling interest rates, promises a rebound in activity in the coming months.
U.S. Economic Data and Fed Expectations
U.S. Federal Reserve (Fed) chief Jerome Powell indicated on Monday that the Fed is likely to stick with another quarter-percentage point cut in interest rates. Traders now give a 41 percent chance that the Fed will cut interest rates by half a percentage point at its meeting in early November.
Source: čtk
