Forex News
- The US Dollar stabilizes after a series of mixed macroeconomic indicators in the United States.
- Activity and employment data keep the Federal Reserve in a cautious stance.
- The Japanese Yen slightly outperforms, supported by weaker risk appetite and a more restrictive bias from the BoJ.
USD/JPY trades around 156.60 on Wednesday at the time of writing, virtually unchanged on the day, as the US Dollar (USD) struggles to extend its rebound following mixed US economic releases, while the Japanese Yen (JPY) benefits from a more defensive tone in Asian markets.
In the United States (US), the latest activity indicators send mixed signals. The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) rose to 54.4 in December, up sharply from 52.6 previously and above market expectations, pointing to improved momentum in the services sector. New Orders also increased, reinforcing the view of firmer demand toward year-end. By contrast, the Prices Paid Index eased to 64.3, suggesting some moderation in inflationary pressures, while the Employment Index edged up only modestly to 52.
The US labor market continues to present a more nuanced picture. Job Openings from the Job Openings and Labor Turnover Survey (JOLTS) fell to 7.14 million in November, below expectations, confirming a gradual cooling in labor market conditions. At the same time, the Automatic Data Processing (ADP) Research Institute report showed private-sector payrolls rising by just 41,000 in December, weaker than forecast, despite a rebound after November’s contraction. Taken together, these data support a cautious approach by the Federal Reserve (Fed), with investors continuing to price in a very gradual path of rate cuts in 2026.
Against this backdrop, the US Dollar finds only limited short-term support. The US Dollar Index (DXY) holds around 98.70 after rebounding from daily lows, reflecting mainly position adjustments following the macroeconomic releases rather than a fundamental shift in trend.
On the Japanese side, the JPY shows modest outperformance against the Greenback. In Asia, the currency benefits from a deterioration in risk appetite, fueled by rising diplomatic tensions between China and Japan after Beijing announced restrictions on exports of dual-use goods to Japan. This geopolitical escalation between two major Asian economies has renewed demand for safe-haven assets.
Additional support for the Japanese Yen comes from recent remarks by Bank of Japan (BoJ) Governor Kazuho Ueda, who reiterated the institution’s commitment to further monetary tightening. Although uncertainty remains regarding the exact timing of the next rate hike, this hawkish bias continues to provide structural support to the Japanese currency. In this environment, USD/JPY remains confined to a broad trading range, as markets balance a cautious US monetary policy outlook with factors favoring the Japanese Yen.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | 0.22% | -0.02% | 0.16% | 0.16% | 0.05% | 0.16% | |
| EUR | -0.00% | 0.22% | -0.02% | 0.15% | 0.15% | 0.05% | 0.16% | |
| GBP | -0.22% | -0.22% | -0.23% | -0.06% | -0.07% | -0.17% | -0.06% | |
| JPY | 0.02% | 0.02% | 0.23% | 0.17% | 0.18% | 0.08% | 0.17% | |
| CAD | -0.16% | -0.15% | 0.06% | -0.17% | 0.00% | -0.09% | 0.00% | |
| AUD | -0.16% | -0.15% | 0.07% | -0.18% | -0.01% | -0.10% | -0.03% | |
| NZD | -0.05% | -0.05% | 0.17% | -0.08% | 0.09% | 0.10% | 0.10% | |
| CHF | -0.16% | -0.16% | 0.06% | -0.17% | -0.00% | 0.03% | -0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
- The US Dollar stabilizes after a series of mixed macroeconomic releases in the United States.
- Activity and employment indicators keep US monetary policy in a cautious stance.
- The Canadian Dollar remains under pressure amid lower Oil prices and supply-side factors.
USD/CAD trades around 1.3820 on Wednesday at the time of writing, up 0.10% on the day, supported by a modest rebound in the US Dollar (USD) amid mixed US economic data and persistent weakness in the Canadian Dollar (CAD).
In the United States (US), activity in the services sector shows signs of improvement. The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) came in at 54.4 in December, up from 52.6 previously and above market expectations. This increase points to stronger momentum in the services sector, although some components remain mixed. The Prices Paid Index eased to 64.3, suggesting a slight moderation in inflationary pressures, while the Employment Index rose to 52, indicating a moderate improvement in labor market conditions in the services sector. New Orders also increased, reinforcing the view of firmer demand toward year-end.
At the same time, other labor market indicators paint a more nuanced picture. Job Openings from the Job Openings and Labor Turnover Survey fell to 7.14 million in November, below expectations, confirming a gradual cooling in the labor market. The report from the Automatic Data Processing (ADP) Research Institute also showed private sector payrolls rising by 41,000 in December, weaker than forecast, despite a rebound after November’s contraction. Taken together, these data keep the Federal Reserve (Fed) in a wait-and-see mode ahead of its late-January meeting, with markets continuing to price in a cautious path of rate cuts during 2026.
The US Dollar nevertheless finds some short-term support. The US Dollar Index (DXY) holds around 98.60 after rebounding from daily lows, reflecting position adjustments following the macroeconomic releases. This move supports USD/CAD, despite expectations remaining tilted toward gradual monetary easing by the Federal Reserve.
On the Canadian side, the Canadian Dollar remains weighed down by falling Oil prices, a key pillar of the country’s economy. Crude Oil prices decline amid fears of excess supply after comments by US President Donald Trump suggesting a potential delivery of 30 to 50 million barrels of Venezuelan crude to the United States (US). This prospect revives concerns about an already well-supplied market and weighs on commodity-linked currencies.
Although Canada’s Ivey Purchasing Managers Index rose to 51.9 in December, signaling a return to expansion territory for business activity, this support is not enough to offset the negative impact of lower Oil prices on the Canadian Dollar.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.00% | 0.19% | 0.03% | 0.12% | 0.18% | 0.10% | 0.14% | |
| EUR | 0.00% | 0.21% | 0.04% | 0.13% | 0.19% | 0.11% | 0.15% | |
| GBP | -0.19% | -0.21% | -0.15% | -0.08% | -0.02% | -0.10% | -0.06% | |
| JPY | -0.03% | -0.04% | 0.15% | 0.09% | 0.14% | 0.06% | 0.11% | |
| CAD | -0.12% | -0.13% | 0.08% | -0.09% | 0.06% | -0.03% | 0.02% | |
| AUD | -0.18% | -0.19% | 0.02% | -0.14% | -0.06% | -0.08% | -0.03% | |
| NZD | -0.10% | -0.11% | 0.10% | -0.06% | 0.03% | 0.08% | 0.04% | |
| CHF | -0.14% | -0.15% | 0.06% | -0.11% | -0.02% | 0.03% | -0.04% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
- EUR/USD trades flat as mixed US data fail to spark a fresh direction.
- Strong ISM services activity contrasts with signs of labour-market softening.
- Markets continue to price a cautious Fed easing path into the year ahead.
The Euro (EUR) trades little changed against the US Dollar (USD) on Wednesday, as traders show a muted reaction to a mixed batch of US economic data. At the time of writing, EUR/USD is trading around 1.1691, consolidating after losing around 0.30% on Tuesday.
The Institute for Supply Management (ISM) reported that the US Services PMI rose to 54.4 in December, beating market expectations of 52.3 and improving from 52.6 in November. The report pointed to improving momentum in the US services sector, with business activity ending 2025 on its strongest footing of the year and remaining in expansion territory for a tenth straight month.
The Employment Index rose to 52 in December from 48.9, returning to expansion territory and indicating that hiring conditions stabilised toward year-end. New Orders strengthened notably, climbing to 57.9 from 52.9. Meanwhile, the Prices Paid Index slipped to 64.3 from 65.4.
While the ISM survey pointed to resilient activity, labour-market indicators pointed to emerging softness. ADP data showed private payrolls rose by 41K in December, below expectations of 47K, though reversing November’s decline of 32K, which was revised down to 29K.
Separately, the JOLTS survey revealed that job openings fell to 7.146 million in November from 7.449 million, undershooting market forecasts of 7.6 million.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 98.60.
From a monetary policy perspective, the mixed data keep the Federal Reserve (Fed) in a wait-and-see mode ahead of its January 27-28 meeting. The pickup in services activity argues against any rush toward aggressive easing, but signs of labour-market softening continue to support the case for gradual rate cuts. Markets remain aligned with a cautious easing outlook, with traders currently pricing in around two interest-rate cuts in 2026.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- GBP/USD hovers near 1.3495 as strong ISM Services PMI lifts the US Dollar despite mixed labor signals.
- Rising VIX reflects growing risk aversion, weighing on the Sterling due to its equity-linked correlation.
- Traders focus on Jobless Claims and NFPs as UK data remains scarce this week.
The Pound Sterling (GBP) is down 0.10% on Wednesday against the US Dollar (USD) amid a scarce economic docket in the United Kingdom (UK) and following a good employment report in the United States. At the time of writing, GBP/USD trades at 1.3486 after hitting a daily high of 1.3516.
Sterling trades flat as upbeat US services data and rising volatility support the Dollar, pressuring Cable
Market mood is mildly risk-off as the CBOE Volatility Index (VIX) shows traders are buying insurance against a reversal in US equities, with VIX posting nearly 2% gains.
The ISM Services PMI rose sharply in December, showing that business activity in the services sector is strengthening. The index improved from 52.6 to 54.4, exceeding estimates of 52.3. Insights of the survey showed that the Employment subcomponent improved from 48.9 to 52, while Prices Paid decreased from 65.4 to 64.3.
At the same time, the Department of Labor revealed the November JOLTS Job Openings report, which showed that vacancies dropped from October’s 7.449 million to 7.146 million.
Earlier, the ADP Employment Change report for December revealed that the economy added 41,000 jobs below estimates of 47,000 but an improvement compared with November’s print, which showed companies slashed 29,000 jobs.
Following the data releases, the Greenback bounced off daily lows, exerting pressure on Sterling. The US Dollar Index (DXY), which tracks the performance of the American currency versus other six, is up 0.06% to 98.65.
In the meantime, Cable is also pressured by investors turning risk-averse, as it has correlated positively with global equity markets. A scarce economic docket in the UK would keep traders focused on US economic developments and political woes.
Ahead, US Initial Jobless Claims for the week ending January 3 are expected to increase from 199K to 210K. Besides this, eyes are on the release of December’s Nonfarm Payroll figures on Friday, with economists projecting the creation of 60K jobs, beneath the previous reading of 64K.
GBP/USD Price Analysis: Technical outlook
The GBP/USD pair is poised to print back-to-back daily bearish candles, an indication of US Dollar strength, but so far, the pair is far from shifting bearish bias. Momentum as measured by the Relative Strength Index (RSI) favors buyers, but recently dipped below the latest low, aiming toward its neutral line.
If GBP/USD tumbles below 1.3400, look for a test of the 200-day SMA at 1.3379. Once surpassed, bears could drive the exchange rate towards intermediate support at 1.3179, the December 2 low. Conversely, a daily close above 1.35 would keep buyers hopeful of re-testing the 1.36 mark.
(This story was corrected on January 7 at 15:54 GMT to day that the previous ADP Employment Change reading was -29K, not -32K.)
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.31% | -0.17% | -0.13% | 0.50% | -0.77% | -0.35% | 0.53% | |
| EUR | -0.31% | -0.48% | -0.38% | 0.19% | -1.08% | -0.65% | 0.22% | |
| GBP | 0.17% | 0.48% | -0.04% | 0.68% | -0.60% | -0.17% | 0.71% | |
| JPY | 0.13% | 0.38% | 0.04% | 0.62% | -0.66% | -0.23% | 0.70% | |
| CAD | -0.50% | -0.19% | -0.68% | -0.62% | -1.11% | -0.84% | 0.04% | |
| AUD | 0.77% | 1.08% | 0.60% | 0.66% | 1.11% | 0.43% | 1.33% | |
| NZD | 0.35% | 0.65% | 0.17% | 0.23% | 0.84% | -0.43% | 0.88% | |
| CHF | -0.53% | -0.22% | -0.71% | -0.70% | -0.04% | -1.33% | -0.88% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
2026 GDP forecasts now point to 2.1% growth in the US and 1.2% in the Eurozone, up from earlier estimates, yet the dollar has stabilized rather than rallied. In Europe, modest growth upgrades have coincided with lower expectations for ECB rate cuts, reflecting a shift in policy rhetoric rather than fundamentals alone, Société Générale's FX analysts note.
ECB rate cut bets erode on upgraded Eurozone growth
"Current 2026 consensus forecasts look for GDP growth to come in at 2.1% in the US and 1.2% in the Eurozone. Back in April, as the dollar was sliding, the forecasts were 1.2% for the Eurozone and 1.4% in the US."
"The upward adjustment in US growth expectations has seen the dollar stabilize rather than rally, because the market hasn’t shifted rate differentials. Market pricing of end-2026 Fed Funds has remained at 3% as growth forecasts have risen in recent months."
"By contrast, a modest upgrade in European growth expectations (from 1.1% to 1.2%) has been accompanied by a gradual erosion in ECB rate cut expectations, fuelled in large part by ECB rhetoric."
- Gold pulls back from the $4,500 area as traders book profits ahead of key US data.
- Geopolitical tensions and Fed easing bets keep the downside limited.
- Technically, XAU/USD holds above key averages, keeping the broader uptrend intact.
Gold (XAU/USD) trades on the back foot on Wednesday as selling pressure emerges near the $4,500 psychological mark, prompting mild profit-taking at elevated levels.
At the time of writing, XAU/USD is trading around $4,430, down nearly 1.4% on the day, as the US Dollar holds firm after a mixed set of US economic releases.
The ADP Employment Change report showed private payrolls rose by 41K in December, below expectations of 47K, but reversing the previous month’s decline of 32K, which was downwardly revised to 29K. Meanwhile, the ISM Services PMI surprised to the upside, rising to 54.4 in December from 52.6 and beating forecasts of 52.3.
JOLTS data showed job openings fell to 7.146 million in November from 7.449 million, undershooting expectations of 7.6 million.
Despite the pullback, the downside appears limited so far, with dip-buying interest likely to pick up as ongoing geopolitical tensions keep broader market sentiment fragile and safe-haven demand intact for Bullion.
At the same time, sustained expectations of further monetary policy easing by the Federal Reserve (Fed) continue to provide an additional layer of support. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets, such as Gold.
Market movers: US data, Fed outlook and geopolitical risks steer market sentiment
- The US-Venezuela standoff remains front and centre after a dramatic US military operation over the weekend led to the capture and ousting of Venezuelan President Nicolás Maduro. In the latest developments, US President Donald Trump said late Tuesday that Venezuela would turn over between 30 million and 50 million barrels of Oil to the US at market prices, with proceeds intended to benefit both nations. Venezuela holds the world’s largest proven Crude Oil reserves at roughly 303 billion barrels.
- Renewed US strategic interest in Greenland is adding to geopolitical tensions. The White House said on Tuesday that President Donald Trump and his advisers are “discussing a range of options” to acquire Greenland, adding that the use of the military “is always an option.”
- Data released so far this week point to cooling momentum in the US economy. The latest S&P Global PMI surveys showed business activity losing steam in December, with the Services PMI easing to 52.5 from 54.1 and the Composite PMI slipping to 52.7 from 54.2. Meanwhile, the ISM Manufacturing PMI remained in contraction territory at 47.9, easing from November’s 48.2.
- On the monetary policy front, markets are pricing in around two interest rate cuts this year amid signs of labour market cooling and moderating inflation. However, the Fed is widely expected to keep interest rates unchanged at its January 27-28 meeting, with upcoming data, especially Friday’s Nonfarm Payrolls (NFP) report, likely to shape near-term policy expectations.
Technical analysis: $4,500 caps upside as bulls defend $4,450 support
From a technical perspective, Gold remains constructive on the 4-hour chart, with prices holding comfortably above the 50-period and 100-period Simple Moving Averages (SMAs). This setup keeps the broader bullish bias intact.
A sustained break below $4,450 would weaken the bullish structure and shift the near-term bias to the downside, exposing the next support levels near $4,400, followed by the $4,300 psychological handle.
On the upside, a decisive break of the $4,500 psychological barrier would confirm the continuation of the prevailing bullish trend and open the door for a retest of the all-time high near $4,549, set on December 26.
Momentum indicators remain supportive. The Relative Strength Index (RSI) is hovering around 58, pointing to positive momentum without overbought conditions. Meanwhile, the Average Directional Index (ADX) sits near 20, suggesting the trend remains fragile and that a period of consolidation could precede the next directional move.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- AUD/USD trades near flat after easing back from a data-driven jump following Australian inflation figures.
- November CPI and trimmed mean inflation slowed but remained above the RBA’s 2–3% target range.
- The technical outlook stays bullish, with prices holding near 15-month highs despite overbought signals.
The Australian Dollar (AUD) trades flat against the US Dollar (USD) on Wednesday, with AUD/USD easing back after an initial advance triggered by Australia’s latest inflation data. At the time of writing, the pair is trading around 0.6738, holding near 15-month highs.
Australia inflation eased in November but remains above the RBA’s 2-3% target range. Data released earlier showed the monthly Consumer Price Index (CPI) was unchanged on the month after a flat reading in October. On an annual basis, CPI slowed to 3.4% in November from 3.8%.
The policy-relevant trimmed mean CPI rose 0.3% on the month in November, slowing from 0.4% in October, while the annual trimmed mean moderated to 3.2% from 3.3%.
AUD/USD saw a muted reaction to the latest US economic releases. The ADP Employment Change report showed private payrolls rose by 41K in December, below expectations of 47K, but reversing the previous month’s decline of 32K, which was downwardly revised to 29K. Meanwhile, the ISM Services PMI surprised to the upside, rising to 54.4 in December from 52.6 and beating forecasts of 52.3.
JOLTS data showed job openings fell to 7.146 million in November from 7.449 million, undershooting expectations of 7.6 million.
From a technical perspective, the Relative Strength Index (RSI) hovers near 69, approaching overbought territory and raising the risk of a near-term pullback. That said, the broader technical structure remains firmly bullish after a decisive break above the former trendline resistance near 0.6550, with prices holding well above the 50-day and 100-day Simple Moving Averages (SMAs).
If a pullback materialises, AUD/USD could find initial support near the 0.6660 area. A sustained break below this region would weaken the bullish structure and expose the 0.6590-0.6570 zone, where the 50-day and 100-day SMAs converge, making it a key technical support area.
The Average Directional Index (ADX) near 35.36 underscores strong trend strength. On the upside, a continuation of the uptrend could open the door toward the 0.6800 psychological level, with scope for a further extension toward the 2024 high above 0.6900.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | 0.02% | -0.09% | -0.04% | -0.00% | -0.10% | -0.01% | |
| EUR | 0.09% | 0.11% | -0.02% | 0.05% | 0.08% | -0.02% | 0.08% | |
| GBP | -0.02% | -0.11% | -0.13% | -0.06% | -0.03% | -0.13% | -0.03% | |
| JPY | 0.09% | 0.02% | 0.13% | 0.06% | 0.09% | -0.01% | 0.09% | |
| CAD | 0.04% | -0.05% | 0.06% | -0.06% | 0.03% | -0.07% | 0.03% | |
| AUD | 0.00% | -0.08% | 0.03% | -0.09% | -0.03% | -0.09% | 0.00% | |
| NZD | 0.10% | 0.02% | 0.13% | 0.01% | 0.07% | 0.09% | 0.10% | |
| CHF | 0.00% | -0.08% | 0.03% | -0.09% | -0.03% | -0.00% | -0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- JOLTS Job Openings declined to 7.14 million in November.
- The US Dollar Index stays in a tight daily channel above 98.50.
The number of job openings on the last business day of November stood at 7.146 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Wednesday. This reading followed the 7.449 million openings recorded in October (revised from 7.67 million) and came in below the market expectation of 7.6 million.
"Over the month, hires were little changed and total separations were unchanged at 5.1 million each. Within separations, both quits (3.2 million) and layoffs and discharges (1.7 million) were little changed," the BLS noted in its press release.
Market reaction
This report failed to trigger a significant market reaction. At the time of press, the US Dollar Index was virtually unchanged on the day at 98.60.
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
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