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Ease in US Dollars
Yes, that is correct. The US dollar eased on Monday as risk sentiment improved on hopes China’s policy stimulus might stabilize the economy, while US jobs data boosted bets the Federal Reserve could be at the end of its rate hike cycle.
The dollar index, which measures the note against a hamper of six major currencies, fell 0.15% to 104.08. The euro rose 0.25% to $1.0799.
China’s central bank announced on Sunday that it would cut the reserve condition ratio for all banks by 0.5 percentage points, effective September 15. The move is expected to free up about 1.2 trillion yuan ($188 billion) in liquidity for the Chinese economy.
The Chinese government has also been taking other steps to boost growth, such as cutting taxes and providing subsidies to businesses. These measures have helped to improve risk sentiment and support the Chinese currency, the yuan.
The US jobs data also helped to boost risk sentiment. The US economy added 372,000 jobs in August, beating expectations. The unemployment rate remained unchanged at 3.8%.
The strong jobs data suggests that the US economy is still rising but at a slower pace than earlier this year. This could lead the Federal Reserve to slow down its pace of interest rate hikes.
Overall, the combination of China’s policy stimulus and the strong US jobs data helped to improve risk sentiment and support the euro and other currencies against the dollar.