Dollar gains after jobs boost

[ed]

The U.S. dollar edged higher Friday, helped by positive news about the U.S. jobs market, while the Japanese yen gained after a relatively hawkish Bank of Japan policy meeting.

At 04:00 ET (08:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher to 97.175, rebounding after falling earlier in the week to its lowest since February 2022.

Dollar helped by weekly claims data
The dollar received a boost in the previous session after data showed that the number of Americans filing new applications for unemployment benefits fell last week, reversing the prior week’s jump.

Initial claims for state unemployment benefits decreased 33,000 to a seasonally adjusted 231,000 for the week ended September 13. Claims in the prior week had jumped to 264,000, a level last seen in October 2021.

“This was rare positive news on the jobs market, and one that justifies the dollar’s staying bid for now,” said analysts at ING, in a note.

This helped the dollar bounce back after the Federal Reserve cut interest rates on Wednesday, for the first time this year, and suggested the likelihood of two more reductions this year.

That said, “we still think the dollar is trading too much on the strong side after the Fed meeting and expect some pullback in the coming days. Cheaper funding costs should contribute to fuel hedging demand for the USD and prevent larger appreciative trends,” ING added.

[jacson4]

Dollar bouncing back on strong jobs data Always a key driver for market sentiment

[Nahid10]

Weekly claims drop shows resilience U.S. labor market still holding up well.