US Dollar Losing Ground Despite Last Week’s Strong NFP Report
The US job growth surged in February, recording its biggest increase in more than 1-1/2 years, but a slowdown in wage gains pointed to only a gradual increase in inflation this year. Nonfarm payrolls jumped by 313.000 jobs last month. Average hourly earnings edged up 0.1%, to $26.75 in February, a slowdown from the 0.3% rise in January. That lowered the year-on-year increase in average hourly earnings to 2.6% from 2.8% in January.
Wage growth remains muted, and with this week’s CPI unlikely do indicate a significant uptick in inflation. Slow wage growth, however, could temper expectations the Fed will raise its rate forecast to four hikes this year from three.
The US dollar weakened versus the Japanese yen, as traders worried that a suspected cronyism scandal in Japan involving the sale of state-owned land could dampen investors' risk appetites. It became known that the Ministry of Finance of Japan recognized the fact of falsification of 14 documents related to the sale of state land at a discounted price of the company associated with Prime Minister Shinzo Abe.
Gold prices held steady, as the US dollar mildly weakened after broadly strengthening thanks to Friday's upbeat nonfarm payrolls report. Gold traded at $1,323.1 level. Oil markets edged up on the back of a drop in the number of US rigs drilling for more production. Also, the American economy continued to create jobs, which industry hopes will drive higher fuel demand. West Texas Intermediate (WTI) crude futures were at $62.10 a barrel, up 0.1%. Brent crude futures were at $65.58 per barrel, increased by 0.1%.