The US dollar fell to a five-week low today Thursday, reaching 105.6 at the opening bell. The DXY index, which measures the performance of the USD, is down after reaching a high of 107.35 last month. The macroeconomic factors in the US led to the decline of the dollar amid uncertainties in the jobs and employment sector.
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The dollar cooled today after the latest data showed that American employers created fewer jobs than expected last month. The report fell short of expectations as employers added 175,000 jobs, compared to the projected 243,000 jobs. That is a drop of almost 28% and a huge shock for the labor market.
Will the US Dollar Fall From Today?
The US unemployment rate rose from 3.8% to 3.9% today, raising concerns among markets about the economy and the dollar. However, Jason Pride, head of investment strategy and research at Glenmede Corporation, said the USD could sail through. “An unemployment rate of 3.9% is not something disastrous,” he said.
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Moreover, today facts shows that currency investors will buy the dips in the US dollar every month in 2024. This move strengthens the dollar, allowing it to hold its resistance level. Continued buying of the dips caused the USD to bounce back in price in the first quarter of 2024.
“This points to an economy that is not in dramatic decline, but certainly points to a looser labor market. From the Fed's perspective, the numbers are weak across the board.” said Pride. Therefore, the decline of the US dollar today cannot be a concern as a price rebound is looming.
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While the US dollar could fall today, the commodity market's bullish stance could push prices higher. The development indicates that the USD has more chances to move north than south.