Dollar on the defensive after jobs data, spotlight on Fed

The dollar fell on Wednesday, ahead of an expected rise in U.S. interest rates, and as gloomy jobs data, a standoff over the U.S. debt ceiling and nervousness following banking collapses clouded the investment outlook.

U.S. job openings fell for a third straight month in March and layoffs increased to the highest in more than two years, data showed on Tuesday, offering hope a weaker labour market could aid the Fed’s fight against inflation.

The dollar index , which measures the U.S. currency against six others, fell by 0.25% to 101.61, dropping for a second day in a row.

The Fed is widely expected to raise interest rates by 25 basis points when it concludes a two-day meeting on Wednesday and investor focus will be on what policymakers signal they might do next.

Right now, the derivatives market shows traders believe this will be the last hike before the Fed switches to rate-cut mode. The central bank has said its actions will depend on incoming data, much of which has shown the economy is slowing and price pressures are easing, but not by enough to warrant an abrupt shift in policy.

This report’s information was first seen on REUTERS; to read more, click this link.