The relentless sell-off of the US dollar index (DXY) accelerated on Monday as the market continued to focus on the disappointing US jobs numbers. The index has declined for the past three consecutive days and is trading at the lowest level since February 25.
US dollar index under pressure
The US dollar has declined against most currencies. It has fallen by 0.12% against the Swiss franc and Canadian dollar and by more than 1% against the British pound.
This decline is happening following the relatively weak US non-farm payrolls (NFP) data that were published on Friday last week. The data revealed that the US economy added just 266,000 jobs in April this year. This decline was lower than the 978,000 that analysts polled by Reuters were expecting. The Bureau of Labour Statistics (BLS) also adjusted downwards the jobs that were created in March to 770,000.
These numbers show that the American economy is not recovering as fast as analysts were expecting. However, some analysts believe that the labour market is weak because of the enhanced unemployment insurance benefits given by Joe Biden’s administration.
Looking ahead, the dollar index will react to the latest inflation numbers scheduled for Wednesday. Analysts expect that consumer prices jumped by more than 3% in April, fueled by the higher crude oil prices and the $1.9 trillion stimulus package that was passed in March this year.
Flash data suggest that consumer prices have surged. For example, lumber prices have quadrupled in the past 12 months, raising house prices. Similarly, other commodities like iron ore and copper are trading at their all-time highs. Crude oil and natural gas prices have also surged to the
