Us Dollar Under Pressure Nbc

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Us Dollar Under Pressure Nbc

Us Dollar Under Pressure On Weak Labor Market - Nbc

According to FX analysts from NBC, the US Dollar is under selling pressure amid a weakening of the US labor market. All the recent data hints that the labor market has deteriorated in the last few months. This has put excessive selling pressure on the greenback which is now on the back foot against the JPY, EUR, and other currencies.

Unemployment Rate Up To 4.3%

However, experts believe that the weakness in the US Dollar is temporary and not long-lived. They believe that an improvement in the labor market conditions will correct this weakness.

The data from July showed that the unemployment rate has gone up to 4.3%. This marks the 4th month in a row of higher-than-forecasted readings and has affected the FOMC's year-end expectations.

Now, it seems that Powell will also have to focus on supporting the employment side rather than focusing entirely on the inflation situation.

Also, it will make the decision to cut rates a lot more comfortable for the US Federal Reserve. Right now, the easiest way to support the labor market and bring down the unemployment rate is to start the easing cycle.

Any weakness in the US economy leads to risk-off trade in the financial markets, which usually invites the strengthening of the US Dollar.

If we look at the bigger picture, there's no reason for the US Federal Reserve to delay the rate cuts any further. Failure to do so will further deteriorate the labor market, making the US Dollar weaker. Conversely, there's also a risk of a weaker US Dollar if the Fed starts with its easing cycle.

Either way, it seems that the US Dollar has a bumpy road ahead of it with the US elections right around the corner. After the conclusion of the US elections, we may see a rally in the US Dollar.

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