The US dollar declined to a five-week low today on Thursday reaching 105.6 during the opening bell. The DXY index, which measures the performance of the USD shows the currency slip after touching a high of 107.35 last month. The macroeconomic factors in the US led to the dollar decline amid uncertainties in the jobs and employment sector.
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The dollar cooled down today after the latest data showed that US employers created fewer jobs than expected last month. The report fell below expectations as employers added 175,000 jobs compared to the expected jobs rate of 243,000. That’s a decline of nearly 28% and a massive jolt to the labor market.
Will The US Dollar Decline From Today?
The unemployment rate in the US today surged to 3.9% from 3.8% making the markets worried about the economy and dollar. However, Jason Pride, Chief of Investment Strategy and Research at Glenmede Corporation said that the USD could sail through. “An unemployment rate of 3.9% is not something disastrous,he said.
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In addition, today’s data shows that currency investors are buying the dips in the US dollar every month in 2024. The move is cementing the dollar making it to hold on to its resistance level. The constant buying of the dips is what made the USD bounce back in price during Q1 of 2024.
“This indicates an economy that is not declining dramatically, but it definitely indicates a looser labor market. The data’s soft across the board from the Fed’s perspective,” said Pride. Therefore, the decline in the US dollar today could not be worrisome as a rebound in price could be on the cards.
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While the US dollar could be down today, the bullish thesis of the commodity market could make its price surge. The development indicates that the USD has more chances of heading north than south next.
