The US dollar falls to its lowest level in three weeks as employers add fewer jobs than expected

The DXY index, which measures the spot performance of the US dollar, shows the currency has fallen to a three-week low. The USD is now at 105.1 and is up just 0.1 point in day trading, up 0.10%. On the other hand, gold prices are also heading south as commodity investors indulge in profit booking and sell-offs. Gold prices rose to nearly $2,380 last week but faced corrections as retail investors and institutional funds posted short-term gains.

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Both the US dollar and gold are now on a slippery slope due to macroeconomic conditions affecting their price performance. This development puts the spotlight on commodity markets as they delivered top returns for investors this year in 2024. Read here how commodity markets generated huge profits for private investors, institutional funds and central banks.

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Job losses push the US dollar to a three-week low

The dollar then fell to its lowest level in three weeks latest data shows that US employment slowed in April 2024. Employers added fewer jobs than expected and markets responded to the development. The report fell short of expectations, as employers added only 175,000 jobs last month, compared to the expected 243,000 jobs.

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In addition, the US unemployment rate rose from 3.8% to 3.9%, adding to concerns about the US dollar. In addition, annual wage growth cooled, raising expectations that the Federal Reserve would cut interest rates twice this year. “An unemployment rate of 3.9% is not something disastrous.” says Jason Pride, head of investment strategy and research at Glenmede Corporation in Philadelphia.

“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.” he said. In conclusion, if the labor market does not recover next month, problems could arise for the US dollar's prospects.