1 May 2015
Tightening labour market offers some support to USD – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, comments that the falling dollar got some relief after yesterday’s initial jobless claims report fell to a new cyclical low, supporting the argument that tightening labour market was supporting wage-growth.
Key Quotes
“Position adjustment is likely exaggerating the scale of US dollar weakness in the near-term. The correction lower in the US dollar appears to have already overshot the adjustment in the relative yield spreads. Still it is not yet clear that the position adjustment is complete which could yet see the US dollar weakness overshoot further in the near-term.”
“The US dollar derived some support yesterday from encouraging reports on the health of the US labour market which should help ease concerns over a more sustained slowdown in the US economy.”
“The latest initial claims report revealed that claims fell to a new cyclical low. There was also further evidence that the tightening US labour market is resulting in a pick-up in wage growth which will support economic growth and encourage the Fed to consider tightening monetary policy.”
“The latest Employment Cost Index revealed that wages and salaries increased more firmly for the fourth consecutive quarter lifting the annual rate of growth to 2.6%.”
Key Quotes
“Position adjustment is likely exaggerating the scale of US dollar weakness in the near-term. The correction lower in the US dollar appears to have already overshot the adjustment in the relative yield spreads. Still it is not yet clear that the position adjustment is complete which could yet see the US dollar weakness overshoot further in the near-term.”
“The US dollar derived some support yesterday from encouraging reports on the health of the US labour market which should help ease concerns over a more sustained slowdown in the US economy.”
“The latest initial claims report revealed that claims fell to a new cyclical low. There was also further evidence that the tightening US labour market is resulting in a pick-up in wage growth which will support economic growth and encourage the Fed to consider tightening monetary policy.”
“The latest Employment Cost Index revealed that wages and salaries increased more firmly for the fourth consecutive quarter lifting the annual rate of growth to 2.6%.”