The number of job openings on the last business day of July stood at 7.18 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Wednesday. This reading followed the 7.35 million (revised from 7.43 million) openings recorded in June and came in below the market expectation of 7.4 million.
“Over the month, both hires and total separations were unchanged at 5.3 million. Within separations, both quits (3.2 million) and layoffs and discharges (1.8 million) were unchanged,” the BLS noted in its press release and continued:
“The number of job openings decreased in health care and social assistance (-181,000); arts, entertainment, and recreation (-62,000); and mining and logging (-13,000).”
Market reaction to JOLTS Job Openings data
The US Dollar (USD) came under renewed selling pressure following this report. At the time of press, the USD Index was down 0.2% on the day at 98.10.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.26% | -0.34% | -0.09% | 0.07% | -0.39% | -0.17% | -0.13% | |
| EUR | 0.26% | -0.07% | 0.17% | 0.33% | -0.26% | 0.08% | 0.12% | |
| GBP | 0.34% | 0.07% | 0.24% | 0.41% | -0.18% | 0.16% | 0.20% | |
| JPY | 0.09% | -0.17% | -0.24% | 0.16% | -0.38% | -0.16% | -0.02% | |
| CAD | -0.07% | -0.33% | -0.41% | -0.16% | -0.54% | -0.25% | -0.21% | |
| AUD | 0.39% | 0.26% | 0.18% | 0.38% | 0.54% | 0.17% | 0.38% | |
| NZD | 0.17% | -0.08% | -0.16% | 0.16% | 0.25% | -0.17% | 0.04% | |
| CHF | 0.13% | -0.12% | -0.20% | 0.02% | 0.21% | -0.38% | -0.04% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
This section below was published as a preview of the JOLTS Job Openings data at 08:00 GMT.
- The US JOLTS data will be watched closely ahead of the release of the August Nonfarm Payrolls report on Friday.
- Job Openings are forecast to edge lower to 7.4 million in July.
- The state of the labor market is a key factor for Fed officials when setting interest rates.
The Job Openings and Labor Turnover Survey (JOLTS) will be released on Wednesday by the United States (US) Bureau of Labor Statistics (BLS). The publication will provide data about the change in the number of Job Openings in July, alongside the number of layoffs and quits.
Markets expect Job Openings to decline slightly to 7.4 million in July, compared to the 7.437 million in June. The JOLTS will be released a few days before another crucial labor report, the Nonfarm Payrolls data for August, due on Friday. The US BLS’s latest employment report showed that Nonfarm Payrolls rose by 73,000 in July, missing the market expectation of 110,000. Additionally, the BLS announced that the change in total Nonfarm Payrolls for May and June was revised down by 125,000 and 133,000, respectively.
JOLTS data is scrutinized by market participants and Federal Reserve (Fed) policymakers because it can provide valuable insights into the supply-demand dynamics in the labor market, a key factor impacting salaries and inflation. Job Openings have been declining steadily since reaching 12 million in March 2022, indicating a steady cooldown in labor market conditions. In January of this year, the number of Job Openings came in above 7.7 million before declining to 7.2 million by March. Since then, JOLTS Job Openings rose for two consecutive months, reaching 7.77 million in May, followed by a drop below 7.5 million in June.
What to expect in the next JOLTS report?
While speaking at the Jackson Hole Symposium on August 22, Fed Chairman Jerome Powell acknowledged that downside risks to the labor market were rising. “Tighter immigration has led to an abrupt slowdown in labor force growth,” Powell added. Similarly, San Francisco Fed President Mary Daly argued that they can’t wait for perfect certainty without risking harm to the labor market because it will take time before they know whether tariff-related price increases will be a one-off.
Following the dismal labor market report and dovish Fed comments, investors widely expect the Fed to cut the policy rate by 25 basis points (bps) at the September policy meeting, with the CME FedWatch Tool pointing to a nearly 92% probability.
Although the market positioning suggests that the US Dollar (USD) doesn’t have a lot of room left on the downside, a significant decline in Job Openings, with a reading at or below 7 million, could reaffirm worsening conditions in the US labor market and weigh on the USD with the immediate reaction. On the other hand, a stronger-than-forecast print is unlikely to alter market expectations of the policy outlook, limiting any potential positive impact on the USD’s performance.
When will the JOLTS report be released and how could it affect EUR/USD?
Job Openings will be published on Wednesday at 14:00 GMT. Eren Sengezer, European Session Lead Analyst at FXStreet, shares his technical outlook for EUR/USD:
“EUR/USD faces a pivot level at 1.1670, where the 20-day and the 50-day Simple Moving Averages (SMAs) align. On the daily chart, the Relative Strength Index (RSI) indicator stays slightly below 50, highlighting a lack of directional momentum.”
“In case 1.1670 remains intact as resistance, technical sellers could be interested. On the downside, 1.1510-1.1500 (100-day SMA, round level) could be seen as the next support level before 1.1425 (Fibonacci 23.6% retracement of January-July uptrend) and 1.1200 (Fibonacci 38.2% retracement). Looking north, resistance levels could be spotted at 1.1720 (static level), 1.1800 (static level, end-point of the uptrend) and 1.1900 (static level, round level).”
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
(This story was corrected at 14:14 GMT to note that June Job Openings data was revised from 7.43 million, not 7.32 million).
Read the full article here
