US Dollar dips following the weakest employment report since the pandemic

NEW YORK (November 1) The US Dollar Index (DXY) has reversed earlier gains following a well weaker-than-expected US Nonfarm Payrolls (NFP) reading. The impact on the Dollar has been moderate, as the market has considered the impact of strikes and the hurricanes Helen and Milton in the final reading.

Nonfarm payrolls have posted their poorest performance since the pandemic, but the steaady unemployment rate and the uptick in hourly earnings have offsett invesdtor's concerns about a sharp deterioration of the labour market.The focus now is on the US ISM Manufacturing PMI, which is expected to show a minor improvement, still at levels consistent contraction of the sector's business activity.

Daily digest market movers: US Dollar ticks up with key US data on tap

• US Nonfarm payrolls have increased by 12K in October, well below the market expectations of 113K. September's reading has been revised to a 223K increase from the 254Kpreviously estimated.
   
• The negative impact of the headline reading has been tamed by the steady unemployment rate, which remains at 4.1%, and higher hourly earnings, which rose at a 0.3% pace, from 0.2% in the previous month. 
   
• The ISM Manufacturing PMI is expected to have improved marginally to 47.6 from 47.2 in the previous month. Still, it would remain at levels reflecting contraction in the sector’s business activity. 
   
• Data from the CME Group Fed Watch tool reveals that markets remain are almost fully pricing a 25 bps cut by the Federal Reserve (Fed) next week and a 85% chance of another 25 bps cut in December, up from 76% in the previous days.
   
• Investors’ bets that former President Donald Trump will win the US presidential election and implement an inflationary policy of low taxes, big spending and tariffs on imports is providing additional support to the US Dollar.

FXStreet