Sluggish Labor Market Should Have Limited Impact on Dollar for Now

Dow Jones
08/14

0924 GMT - The dollar's current losses should remain contained in the near term even as recent data suggest sluggish momentum in the U.S. labor market, Commerzbank's Volkmar Baur says in a note. The data show a lack of dynamism in the jobs market with unemployment low but little appetite for hiring, he says. One would think this would be reflected in lower wage growth but this isn't the case yet, he says. "Lower wages would certainly also have an impact on inflation and ease pressure on the Federal Reserve to raise interest rates." This will likely take time to materialize, he says. The DXY dollar index falls 0.2% to 99.732.

 

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