The European forex market started to witness a decline in the trading price of the dollar. The data shows that the trading price of the dollar started to edge lower on Friday prior to the release of the jobs report.
US Jobs Data
It is the monthly jobs report that gives a good idea about the unemployment rate in the country and the applications submitted for unemployment. It also gives a good idea about the impact of interest rate hikes and inflation rates on the economy.
As the data is yet to be shared for the US jobs for the month of February, investors have stopped investing in the dollar.
With fewer investments coming in favor of the dollar, the value of the currency has started to move lower.
Japanese Yen Decline
Just as the dollar price was moving lower, the Japanese yen also started to move downwards. This is because the Bank of Japan (BoJ) has decided not to show aggression toward the rising inflation rates.
To be exact, the BoJ has decided that it is not going to increase the interest rates to deal with the rising inflation rates. This could mean that the inflation rates would continue rising and the yen would continue losing its power.
Although the economists are concerned about the BoJ, it has decided not to make any move or show any aggression against the rising inflation rates through interest rate hikes.
This dovish stance against the inflation rate hikes by the BoJ has forced investors to look for other investment options. They have stopped investing in the yen, which has pulled its price lower.
The Dollar Price Index
According to the dollar price index report, the value of the dollar has only grown weaker against the six major currencies.
The data shows that the value of the dollar against the six major currencies has dipped by 0.2%. Following the decline, the value of the greenback against the major currencies is hovering near 105.15.
Although the performance of the DXY was weak on Friday, the rest of the week demonstrated strong performance. Despite the 0.2% decline on Friday, the overall DXY performance for the week remained at a positive 0.7%.
It serves as a breather for the traders for the dollar who may try and push the dollar price higher or keep working on its strong footing starting Monday.
Weekly Jobless Claims
Prior to the release of the weekly jobless claims data, the value of the dollar had been surging. It had continued moving on the right track and the gains were significantly higher compared to the competitors.
However, with the jobless data being released, the dollar steered into the negative zone. The price of the dollar ended up giving back some of the gains it had generated prior to the data release.
The reports shared by the economists are alarming for the unemployment rates. They are claiming that the increase they have recorded for the unemployment claims in the previous month is higher than the 5-month data.
Dollar Performance on Friday
The latest forex market data shows that the dollar price has surged by 0.2% against the Japanese yen. Despite the decline, the dollar price has performed well against the yen.
The yen’s decline was mainly because the BoJ not increasing the interest rates as much as the market had expected. The traders were unhappy and they decided not to support the yen.
On the other hand, the value of the euro recorded a strong 0.2% surge against the dollar price. After a long downtrend, the German economy has started to pick up. This is helping the European economy and thus, the euro price is rising.
The trading price of the sterling has also recorded a surge. It has pushed up by 0.2% in the latest market session against the dollar.