THE US dollar has fallen against most major currencies today as data suggested low wages will most likely discourage the Federal Reserve from raising interest rates.
Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington said: “Mixed messages on America’s labor market last week largely offset and, importantly, failed to move the dial in favour of faster rate hikes from the Fed.
“To excite the dollar and move the needle for the Fed to raise rates at a quicker pace, wage growth would need to move above 3 percent.”
The Federal Reserve will be meeting next week to decide whether or not to raise interest rates.
Non-farm payroll employment is a compiled name for goods, construction and manufacturing companies in the US. It does not include farm workers, private household employees, or non-profit organisation employees.
Average hourly earnings rose by four cents or 0.1 percent, to $26.75 in February which is a slowdown from the 0.3 percent rise in January. This lowered the year-on-year increase in average hourly earnings to 2.6 percent from 2.8 percent in January.
To add to the pressure on the dollar, US President Donald Trump’s imposed tariffs on steel and aluminium imports has lead to an air of uncertainty regarding US tariff protectionism.
“Generally speaking, we think that protectionist regimes do not necessarily support a strong domestic currency either.”
The dollar fell as the Dow Jones dropped 150 points. The S&P500 is trading flat whilst the Nasdaq composite increased by 0.3 percent.