The dollar falls with renewed hope of rate cuts this year

The dollar falls with renewed hope of rate cuts this year
The dollar falls with renewed hope of rate cuts this year

New York (awp/afp) – The greenback weakened on Friday, following a decline in bond rates, investors digesting data on American employment, considered positive for the stock markets, comforted in the hope of cuts in bond rates. Fed this year.

Around 6:30 p.m. GMT, the dollar fell 0.39% against the euro, to its lowest level for almost a month at $1.0767.

The Dollar Index, which compares the greenback to a basket of currencies, slipped to 105.04 points (-0.24%).

The American currency thus followed the easing of bond rates while ten-year yields slipped to 4.49% for the first time in three weeks.

Hopes of a cut in interest rates from the Fed this summer or in September were supported by weaker than expected employment figures in the United States.

This means that in April, the economy slowed down, a positive point for controlling inflation.

Last month, 175,000 jobs were created, compared to 315,000 in March and 240,000 expected by analysts.

The unemployment rate increased slightly, to 3.9% compared to 3.8%.

If this slowdown in the job market does not bode well for workers, it is, however, well received by the Federal Reserve (Fed) and the markets, because it is necessary to go through this to bring inflation back at 2% instead of 2.8%.

“The markets are pleased with the fact that job creation was less good than expected,” recognizes José Torres of Interactive Brokers.

“The slowdown in employment growth, combined with an increase in unemployment and a deceleration of wages support the Fed’s rate reduction forecasts,” he assured.

For Nancy Vanden Houten of Oxford Economics, these figures reinforce “our feeling that the Federal Reserve will wait until September before reducing interest rates.”

The stock market rose thanks to a new appetite for risk, bitcoin rebounded (+5.33% to $61,874 around 7:00 p.m. GMT), the dollar weakened, as did the ounce gold (-0.16% to $2,299.60).

The greenback was already suffering since Wednesday from moderate comments from the president of the American central bank (Fed) Jerome Powell who dismissed the probability that “the next movement on rates would be an increase”.

The Fed decided to leave its high rates unchanged but its boss was confident that inflation was on the right track and that the institution’s monetary policy was “sufficiently restrictive”.

For its part, the yen, which seems to have benefited greatly from two interventions by the Japanese authorities this week, held its position, remaining below 153 yen per dollar, compared to 158 yen last Friday.

“The (Japanese) Ministry of Finance appears to have reacted this week with a series of exchange rate interventions even more forceful than two years ago,” said analysts at Capital Economics.

According to market data reported in the press, the Bank of Japan spent some $35 billion to support the yen overnight from Sunday to Monday, April 29, and another $23 to $25 billion just after the press conference. of the Federal Reserve on Wednesday, May 1.

        Cours de vendredi Cours de jeudi          18H30 GMT               21H00 GMT  EUR/USD 1,0767                  1,0725  EUR/JPY 164,68                  164,78  EUR/CHF 0,9748                  0,9767  EUR/GBP 0,8579                  0,8556  USD/JPY 152,95                  153,64  USD/CHF 0,9055                  0,9106  GBP/USD 1,2550                  1,2534  

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