WASHINGTON/LONDON (Reuters) – The U.S. dollar weakened against a basket of currencies on Tuesday after new jobs data showed U.S. job openings fell to the lowest level since early 2021 in October. The price remained close to its highest price in a week.
The number of job openings, an indicator of labor demand, fell by 617,000 to 8.733 million as of the end of October, lower than expected, the monthly Job Openings and Labor Turnover Survey (JOLTS) report said on Tuesday.
A slowing labor market and subdued inflation are increasing optimism that the U.S. Federal Reserve will likely finish raising interest rates this cycle, with financial markets betting on even a rate cut in mid-2024. It is expected.
“The Fed is still trying to convince the market that they can still raise rates,” said Joseph Trevisani, senior analyst at FXStreet.com. “I think the market thinks it’s all over, but I think the fact that the Fed is willing to continue on this issue is giving everyone pause,” he said.
The dollar index recently rose 0.12% to 103.73, its highest level in about a week. Analysts said the dollar’s modest rise was in part a rebound from a sharp decline in recent weeks, with the dollar index down 3% in November alone, its steepest monthly decline in a year. He said it had become.
Elsewhere, the yuan held firm despite Moody’s downgrade of China’s credit rating outlook as major state-owned banks intervened to stem the decline by selling dollars.
Bitcoin rose above $42,000, near its highest level since April of last year.
The prices for cuts are as follows:
Traders are pricing in at least 125 basis points (bps) of Federal Reserve rate cuts next year, with 50 bps likely by June, according to CME’s FedWatch tool.
“The main focus of the market right now is still what the central bank will do next year on the policy front. There has been a very dramatic dovish reassessment of the Fed and its rate expectations.” [European Central Bank] There has certainly been an impact on currency markets over the past week,” said Lee Hardman, currency strategist at MUFG.
Investors believe the ECB could implement its first interest rate cut by March next year. Eurozone-wide inflation is falling faster than most expected, as evidenced by last Thursday’s consumer price data.
The euro was last trading 0.18% lower at $1.0817.
The yuan firmed after Moody’s decision on Tuesday to downgrade China’s credit outlook to “negative,” which comes after state-owned banks exchanged renminbi for U.S. dollars in the onshore swap market and traded the dollar for dollar. Another reason is that it appears to have been sold on the spot market. A related source revealed.
The pound was little changed at $1.262, down 0.13%, and the yen was stable at $146.91.
The Australian dollar fell 0.82% to $0.65645, below Monday’s four-month high, after the Reserve Bank of Australia (RBA) kept interest rates unchanged at a 12-year high of 4.35% on Tuesday.
Among cryptocurrencies, Bitcoin rose 0.55% to $42,214, just below Monday’s all-time high of $42,404, its highest since April 2022.
The world’s largest cryptocurrency is up 150% this year, helped in part by optimism that U.S. regulators will soon approve a publicly traded spot Bitcoin fund (ETF).
Reporting by Hannah Lang in Washington and Amanda Cooper in London. Additional reporting by Rae Wee in Singapore.Edited by Frances Kelly and Bernadette Baum
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