Daily Economic News 2023-08-10 22:13:14
Last Friday, some of the US non-farm payrolls data released in July were weaker than expected, which made the dollar fall back on Friday. After entering this week, the dollar did not fall further, because the market began to doubt that the Federal Reserve may still raise interest rates in September for some special reasons. On Thursday night Beijing time, the U.S. Bureau of Labor Statistics released the Consumer Price Index (CPI) for July. After falling for 12 consecutive months, the year-on-year growth rate of CPI in the United States rebounded for the first time, climbing back to 3.2%. This made the above-mentioned expectations heat up. After the news was released, the US dollar index fell slightly.
“Non-agricultural” slightly weaker
Some data in the US non-farm payrolls data released last Friday was weaker than expected, which made the dollar retreat on Friday. After entering this week, the U.S. dollar did not fall further, but rose significantly this Tuesday, so the weekly K-line of the U.S. dollar is temporarily positive.
As of around 21:00 Beijing time this Thursday, the U.S. dollar index was temporarily at 102.12 points, a slight gain of 0.12% so far this week.
The U.S. added 187,000 non-farm payrolls in July, missing expectations for an increase of 200,000. The data is the market’s most valued indicator, so this data is a blow to the dollar.
The rest of the non-agricultural related data is bullish for the dollar, so the dollar did not fall too much that day. The specific data are: the average hourly wages in the United States increased by 4.4% in July, higher than the expected increase of 4.2%; the unemployment rate in July was 3.5%, lower than the expected 3.6%.
Although the non-agricultural data is very important, this non-agricultural report should not affect the market’s expectations for the Fed to raise interest rates too much. Although the number of new non-agricultural employment in July was lower than expected, wage growth is obviously a source of inflationary pressure. Therefore, although this non-agricultural employment report is understood by most investors as a negative for the dollar, the basis for this judgment is not very full.
The increasing importance of price data
In the past few weeks, the market had once believed that the Fed might skip the September interest rate meeting and delay the consideration of raising interest rates until the November or December meeting. However, in the last week, this expectation has fluctuated. The reason is not the above-mentioned “non-agricultural” employment data, but the forecast value of the Cleveland Fed’s “Instant Inflation Forecasting Model” shows that the CPI in the United States in July may be higher than the market’s general expectations.
On Thursday evening, the U.S. Bureau of Labor Statistics released its consumer price index (CPI) for July. After falling for 12 consecutive months, the year-on-year growth rate of CPI in the United States rebounded for the first time, climbing back to 3.2%. However, this value was lower than market expectations of 3.3%, 0.2 percentage points higher than June’s 3.0%. The U.S. dollar index fell slightly after the news was released.
In addition, the United States will release July PPI data on Friday.
Price data is one of the most important bases for whether the Fed will raise interest rates in the future. At present, when the market is in dispute over whether the Fed will raise interest rates at its September meeting, the price data of the United States this week is obviously very important.