Low jobless claims and steady unemployment support the USD, offsetting tentative wage growth moderation and Fed policy delay risks.
The US dollar remains supported by a resilient labor market, despite signs of slowing hiring activity. Initial jobless claims held at 209,000, keeping the 4-week moving average below 200,000 for only the fourth time in five years, while unemployment stays low.
Wage growth shows early signs of cooling, but sustained moderation in inflation and labor costs will take time. This delays potential Federal Reserve policy relief, underpinning the dollar’s strength. Recent data also revealed minimal improvements in quits, layoffs, and hiring rates, all remaining historically low relative to unemployment.
EUR/USD movements last week highlighted the labor market’s influence, with Friday’s jobs report driving sharper exchange rate shifts than Wednesday’s inflation data, despite the latter aligning with expectations.