Dollar edges down against yen after signs of labour market weakness

The US dollar edged lower against the yen on Thursday after data showed signs of labor market weakness and a higher-than-expected rise in US inflation in September even though prices were on a downward trend, allowing the Federal Reserve to keep cutting interest rates.

Labor Department data on Thursday showed that the consumer price index increased 0.2 per cent in September. In the 12 months through September the CPI climbed 2.4 per cent, which was the smallest year-on-year rise since February 2021.
 

 

Economists polled by Reuters had forecast the CPI edging up 0.1 per cent and rising 2.3 per cent year-on-year.

 

Other data from the Labor Department also showed that the number of Americans seeking unemployment benefits surged last week, driven partly by Hurricane Helene and furloughs at Boeing.

Initial claims for state unemployment benefits increased to 258,000 last week, compared with a Reuters analyst estimate of 230,000 claims.

The greenback was down 0.39 per cent at 148.71 yen after rising to as high as 149.58 yen for the first time since Aug. 2 . The euro dropped to its lowest since Aug. 9 against the dollar and was down 0.17 per cent on the day at $1.092.

The dollar index, which measures the currency against six key rivals including the yen and euro, was up slightly by 0.1 per cent to 102.97 in choppy trading after hitting its highest since August 15.

"The claims number dominated the story and that's driven bond yields lower because it's reminded the market that the Fed actually has some concerns about the employment story," said John Velis, FX and macro strategist at BNY in Boston.

Traders are betting a nearly 90 per cent chance on the Fed cutting rates by 25 basis points at its next policy decision on Nov. 7, and a 9 per cent probability of no change, the CME Group's FedWatch Tool showed. The yield on benchmark US 10-year notes rose 3.3 basis points to 4.1 per cent.

"We had such a good September job print that this kind of swings back in the other direction and has taken out some of that restrictive Fed pricing, or let me say it's put in some more expectations of a rate cut for the November 7th meeting," Velis added.

The US economy gained 254,000 jobs in September and the unemployment rate fell to 4.1 per cent, Labor Department data had showed on Friday.

The risk-sensitive Australian dollar was up 0.05 per cent to $0.6722. It earlier rose more than 0.3 per cent on the back of an equity rally in top trading partner China as the East Asian nation's central bank launched a swap programme aimed at supporting the stock market.

China's finance ministry is due to hold a highly anticipated news conference on fiscal policy on Saturday. The dollar > was flat to 7.093 versus the offshore Chinese yuan.

In cryptocurrencies, bitcoin gained 0.28 per cent to $60,541.29. Ethereum rose 1 per cent to $2,377.29.

Currency bid prices at 10 October​ 02:51 p.m. GMT

Description RIC Last US Close Previous Session Pct Change YTD Pct High Bid Low Bid

Dollar index 102.98 102.88 0.11 per cent 1.59 per cent 103.06 102.71

Euro/Dollar 1.0921 1.094 -0.16 per cent -1.05 per cent $1.0955 $1.0909

Dollar/Yen 148.76 149.28 -0.26 per cent 5.56 per cent 149.49 148.4

Euro/Yen 1.0921​ 163.31 -0.51 per cent 4.4 per cent 163.6 162.24

Dollar/Swiss 0.858 0.8609 -0.29 per cent 2 per cent 0.8615 0.8559

Sterling/Dollar 1.3049 1.3075 -0.19 per cent 2.55 per cent $1.3094 $1.3011​

Dollar/Canadian 1.3761 1.3711 0.38 per cent 3.82 per cent 1.3768 1.3702

Aussie/Dollar 0.6721 0.6719 0.07 per cent -1.39 per cent $0.6743 $0.6702

Euro/Swiss 0.9371 0.9416 -0.49 per cent 0.9 per cent 0.9419 0.9366

Euro/Sterling 0.8367 0.8367 NOT AVAILABLE per cent -3.47 per cent 0.8385 0.8355

NZ Dollar/Dollar 0.6075 0.6063 0.21 per cent -3.85 per cent $0.6097 0.605

Dollar/Norway 10.757​ 10.7767 -0.18 per cent 6.14 per cent 10.7954 10.7348

Euro/Norway 11.7492 11.79 -0.35 per cent 4.68 per cent 11.8034 11.7375

Dollar/Sweden 10.4043 10.3946 0.09 per cent 3.35 per cent 10.4137 10.3697

Euro/Sweden 11.3637 11.3738 -0.09 per cent 2.14 per cent 11.3825 11.3524