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FOREX-Dollar dips after U.S. jobs report, wage growth eases

Reuters · 01/06/2023 09:50
FOREX-Dollar dips after U.S. jobs report, wage growth eases

Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

Adds quotes, details; updates prices

By Karen Brettell


- The dollar erased earlier gains after U.S. jobs data showed employers added 223,000 jobs in December, more than economists’ forecasts, while wage growth in the month eased.

Economists had expected 200,000 jobs would be added. Wages grew by 0.3% last month, a drop from 0.4% in November and below forecasts of 0.4%. That lowered the year-on-year increase in wages to 4.6% from 4.8% in November.

"There was a bit of a fear that this could be quite a blockbuster print in terms of job growth," which was a risk due to seasonal adjustments that are common in December, said Mazen Issa, senior foreign exchange strategist at TD Securities in New York.

The easing wage growth was also "encouraging," Issa added, though he that there were hawkish elements in the data.

"You had the unemployment rate dropping, which was expected, and an increase in the participation rate," Issa said. "This doesn’t do anybody any favors in determining whether the Fed to do 25 or 50 at its meeting."

The dollar was last little changed on the day against a basket of currencies =USD at 105.11, after earlier reaching 105.63, the highest since Dec. 7.

The euro EUR=EBS was also flat on the day at $1.0524, and the dollar gained 0.20% against the yen JPY=EBS to 133.64.

The Federal Reserve hiked rates by 50 basis points at its December meeting, after making four consecutive 75-bp increases.

Fed funds futures traders increased bets the Fed will hike rates by 25 bps at the conclusion of its two-day meeting on Feb. 1 after Friday's data. A 25-bp increase is seen as a 67% probability, compared with 54% before, with a 50-bp hike seen as a 33% probability. FEDWATCH

Highly anticipated consumer price data due on Jan. 12 could influence U.S. central bank policy.

It is expected to show that headline prices were unchanged in December while core prices increased 0.3%. USCPI=ECI, USCPF=ECI


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Currency bid prices at 9:32AM (1432 GMT)

Description

RIC

Last

U.S. Close
Previous
Session

Pct Change

YTD Pct
Change

High Bid

Low Bid

Dollar index

=USD

105.1100

105.1200

+0.01%

1.565%

+105.6300

+104.9200

Euro/Dollar

EUR=EBS

$1.0524

$1.0521

+0.01%

-1.80%

+$1.0545

+$1.0482

Dollar/Yen

JPY=EBS

133.6350

133.4100

+0.20%

+1.96%

+134.7650

+133.2500

Euro/Yen

EURJPY=

140.65

140.36

+0.21%

+0.25%

+141.4400

+140.2400

Dollar/Swiss

CHF=EBS

0.9369

0.9363

+0.11%

+1.37%

+0.9407

+0.9348

Sterling/Dollar

GBP=D3

$1.1906

$1.1908

-0.03%

-1.56%

+$1.1935

+$1.1842

Dollar/Canadian

CAD=D3

1.3536

1.3568

-0.21%

-0.07%

+1.3664

+1.3524

Aussie/Dollar

AUD=D3

$0.6768

$0.6752

+0.19%

-0.76%

+$0.6790

+$0.6722

Euro/Swiss

EURCHF=

0.9860

0.9851

+0.09%

-0.35%

+0.9883

+0.9849

Euro/Sterling

EURGBP=

0.8839

0.8835

+0.05%

-0.06%

+0.8870

+0.8823

NZ Dollar/Dollar

NZD=D3

$0.6249

$0.6223

+0.39%

-1.61%

+$0.6262

+$0.6193

Dollar/Norway

NOK=D3

10.1625

10.2595

-0.76%

+3.74%

+10.3005

+10.1700

Euro/Norway

EURNOK=

10.6938

10.7654

-0.67%

+1.91%

+10.8140

+10.6993

Dollar/Sweden

SEK=

10.6672

10.6804

-0.07%

+2.49%

+10.7479

+10.6415

Euro/Sweden

EURSEK=

11.2214

11.2290

-0.07%

+0.64%

+11.2924

+11.2198


(Editing by Jan Harvey and Nick Macfie)

((karen.brettell@tr.com))