The jobs report was released at the end of last week’s work week. Economists were confident that 258,000 jobs were added during the previous month. But the Labor Department released data showing that more than 500,000 new jobs were added in the U.S. This shows that the economy continues to grow.
The extremely strong numbers from Friday’s report reduce concerns that the United States will make an announcement. While this optimistic report bodes well for economic growth, it is certainly not about inflation.
At the same time, it dramatically alters the expectations of market participants, who have been focusing their attention on recent GDP reports. At the end of July, the second-quarter GDP estimate was presented. According to the report, GDP volume declined by 0.9%. Prior to that, the BEA had published data showing that GDP volumes declined by 1.6 percent during the first quarter. It is worth remembering that if a country’s economy contracted for two consecutive quarters, that is the classic definition of a recession.
Fear of a disappointing jobs report put pressure on U.S. Treasury yields and the dollar’s decline reversed. The dollar added 0.8%, matching Friday’s decline.
History low for the pound British
Today we can observe history low for the British pound. The British pound has fallen in the international forex market by almost 5% against the dollar – to a record low of $1.0384. The pound fell 0.85% against the U.S. dollar to $1.0762.
The British currency depreciated after the Ministry of Finance of the country promised to continue cutting taxes, raising fears that the new policy will lead to a sharp rise in inflation and the national debt, Bloomberg wrote. The pound’s collapse was the biggest intraday drop since March 2020, when markets were panicked by the start of the COVID-19 pandemic, the publication estimated.
The sell-off in the currency began on Friday, after the government announced a plan for a massive tax cut in the U.K., which will affect individuals and businesses and increase the budget deficit.
“History low for the British pound shows that markets do not trust the UK,” said Saxo Capital Markets strategist Jessica Amir. – The pound is one step away from parity with the dollar, and things will only get worse from here.”
The British currency has already fallen 20% against the dollar this year. According to Bloomberg, the fall in the British pound sterling in 2022 surpassed the collapse seen after the vote to leave the European Union (Brexit) in 2016. At that time, the U.K. currency depreciated by about 16% in one year.
Earlier we reported that the dollar is getting cheaper against most currencies after rising the day before.
The dollar is getting cheaper against most currencies after rising the day before. Global money is getting cheaper
The dollar is getting cheaper against the euro, the yen and the pound sterling today after a solid rise in the previous session on the background of the fact that all the world’s money’s getting cheaper.
The dollar is correcting because investors are trying to fix profits after its significant strengthening, said Trading Economics. Experts believe that the U.S. currency will continue to strengthen on the background of a rapid tightening of monetary policy by the Federal Reserve (FRS). Also, the dollar is supported by reducing the appetite for risk in world markets.
Further growth in volatility in the financial markets will strengthen the dollar because of its status as a “safe haven” currency, said an analyst on the currency market, CBA Carol Kong.
The euro rose 0.53% to $0.9660 against the dollar, up from $0.9609 at the close of the previous session. The day before, European currencies were cheaper against the dollar by 0.8%.
The pound rose by 1.07% to $1.0803 during the trading session, compared to $1.0689 the day before. The exchange rate of the dollar against yen decreased by 0.30% – down to 144.31 yen against 144.75 yen by the end of the previous session. On Monday the American currency grew by 1.5% against the pound and by 1% against the yen.
The index, calculated by ICE, which shows the dollar trend against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and the Swedish krone), was losing 0.5% during trading. The day before, the indicator had updated its 20-year high.
Earlier we reported that the Nasdaq is on the plus side amid signs that growth stocks are recovering.
Nasdaq index rises again amid signs growth stocks are recovering
The Nasdaq index rises again early in Monday’s session as growth stocks try to recover from a sharp sell-off sparked by fears that Fed action will lead to a recession.
The S&P 500 also showed signs of stabilizing after briefly falling below its mid-June closing low of 3.666 on Friday, nearly wiping out the sharp rebound it had achieved over the summer.
The Fed’s announcement that high interest rates could hold out until late 2023 sent the three major U.S. stock indexes down 4-5% last week, with the Dow Jones index near bear market territory on Friday.
Growth was led by sectors that included securities of mega-capitalization companies, including technology S5INFT, communications services S5TELS, and consumer discretionary S5COND.
Shares of Apple Inc, Microsoft Corp, amazon.com Inc, and Tesla Inc, rose 0.9 percent to 2.0 percent, supporting the current Nasdaq index.
“We’re just seeing gains driven by a sense of relief after a very tough period for the Nasdaq and growth stocks,” said Jeffrey Schulze of ClearBridge Investments.
“Obviously, the last month has been very tough for growth stocks as investors re-evaluate higher Fed rates and, ultimately, the ultimate rate of this cycle of monetary policy tightening.”
Earlier we reported that Wall Street closed in the negative; the Dow confirmed a bear market.
- Coronavirus10 months ago
Biden administration still seeking agreement from Mexico on return of asylum seekers
- Stock Markets6 months ago
WeLion Cooperates with Nio to Produce Semi-Solid Battery
- Cryptocurrency10 months ago
Arvalex Token Launches It’s PreSale to Shake Up The Metaverse
- Forex2 months ago
Forex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Cryptocurrency10 months ago
Crypto & NFT Influencer Marketing: Hire an Agency or Do It Yourself?
- Economy10 months ago
Analysis-Europe’s big payday remains elusive even as inflation surges
- Cryptocurrency11 months ago
NFT World Records: CryptoDragons Sold Out 500 Eggs in Its Primary Pre-Sale in Тhe Тwinkling of аn Еye!
- Cryptocurrency9 months ago
In the Wilder World, Staking and Liquidity Mining Have Arrived