US dollar is lower today on expectations that the Federal Reserve won’t begin tapering its asset purchase program until next year. With US jobs growth slowing, and analysts still trying to determine the economic impact of the recent government shutdown, it just doesn’t make sense for the Fed to reduce stimulus right now.
Earlier this week, the payrolls report for September was released (delayed by the government shutdown). The data indicates that hiring has slowed, although there was still an increase in employment. Earlier today, the latest unemployment claims numbers were released for the week ending October 19, and those, too, showed lackluster improvement in the jobs market.
Analysts are also busy trying to determine the economic impact of the government shutdown, and looking ahead to what is sure to be another debt ceiling crisis a few months from now. With all of this uncertainty, it is little surprise that the US dollar is lower today, and little surprise that there is speculation that the Federal Reserve will hold off on tapering its bond purchase program.
For now, it appears dollar weakness is likely to stay.
At 14:09 GMT EUR/USD is up to 1.3795 from the open at 1.3776. GBP/USD has pulled back a bit to 1.6160 from the open at 1.6164. USD/JPY is down to 97.3695 from the open at 97.3775.
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