Dollar depreciates as U.S. wages fall

Posted On: January 09, 2015

The Bloomberg Dollar Spot Index declined 0.1 percent on Friday morning to 1,146.13, after falling as much as 0.4 percent, Bloomberg reported. The index closed on Thursday at 1,147.54, which marked its highest rate since 2004.

The U.S. dollar declined after employee wages fell by 0.2 percent in December, which marked its largest drop since comparable records started in 2006, according to the Labor Department. Meanwhile, U.S. companies added 252,000 jobs during the month and the unemployment rate fell to 5.6 percent, which was its lowest level since June 2008.

"That earnings number is desperately bad," John Hardy, head of foreign exchange strategy at Saxo Bank A/S in Hellerup, Denmark, told Bloomberg. "It could encourage the view that the Fed sits on its hands."

The dollar has nonetheless strengthened in the past few months and many economists expect the rise to persist in 2015. However, projections may be too optimistic, according to CNBC.

The U.S. economy is topping global markets and almost all foreign exchange dealers believe that the currency's rise will continue. However, Jim Iuorio of TJM Institutional Services, told the news source that traders may be underestimating the euro and the yen. If these currencies rise over the next few months, the dollar could weaken.

Category: Industry News


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