The dollar lost ground on Tuesday January 31 after the publication of an indicator showing a deceleration in the rise in wages in the United States, which encourages traders to bet on the imminent end of monetary tightening by the American Central Bank (Fed). .
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| US dollars in a bank in Washington DC |
| Photo: AFP/VNA/CVN |
Around 9:55 p.m. GMT, the euro gained 0.12% on the greenback, at 1.0865 US dollars (USD) for one euro.
The average salary rose by 1% in the fourth quarter in the United States, according to the ECI index (employment cost index) published on Tuesday January 31, i.e. less than the 1.1% forecast by economists, and down from the 1.3% from the third quarter.
“Wage growth is slowing although unemployment remains extremely low“, a relevé Ian Shepherdson, de Pantheon Macroeconomics.
For him, “(Fed Chairman Jerome) Powell’s fears of an (inflationary) wage/price spiral are no longer realistic“. After a wave of wage increases linked to the surge in inflation, since 2021, wages seem to be settling down.
“The message is clear: the Fed should stop raising rates” after a further rise on Wednesday, which is “an acquired fact“, pleads the economist. Operators are thus expecting a further increase of a quarter of a point on Wednesday.
“The market is recalibrating its outlook for Fed policy and I think that’s why the dollar is having a bout of weakness.“, commented Bipan Rai, of CIBC.
Currency traders are betting on one or even two rate cuts in the second half, as inflation normalizes and the economy slows. “It’s going to be hard for the Fed to go against” this perception, warns Bipan Rai.
For the analyst, thegreenback“, one of the nicknames of the American dollar, was also penalized by the estimated evolution of GDP (gross domestic product) in the fourth quarter in the euro zone, which emerged up 0.1% while economists s were expecting a contraction of 0.1%.
“This suggests that the Eurozone has avoided a technical recession“, observed Bipan Rai.
Last headwind for the dollar Tuesday, the last day of the month, which often corresponds to repositioning, unfavorable to the greenback in recent months.
AFP/VNA/CVN
