The Dollar Takes a Break Following US Jobs Data

(CTN News) – The dollar fell below recent peaks on Thursday as traders waited for the latest US labour market data to get a better idea of whether interest rates will be cut this year. Comments from Federal Reserve Chair Jerome Powell were taken as reassuring.

Dollar has performed the best among G10 currencies this year despite an unexpected slowdown in US services growth, though these expectations are much more modest than three months ago.

Since three weeks, the yen has been frozen by the risk of official intervention, and was more or less at 151.56.

Overnight, the euro rose 0.6% to $1.0837, the middle of its year-long range.

Wednesday’s European inflation report confirmed expectations for a rate cut in June. Economic data will guide policymakers, according to Jerome Powell’s balanced remarks.

Traders focused on his statement that recent figures hadn’t changed his broad outlook, and his reminder that “most FOMC members expect to begin lowering the policy rate this year.”.

According to the speech, the Fed is likely to cut rates this year, based on data. ANZ analysts predict the Fed will begin cutting rates by July. According to implied markets, the Fed will cut rates in June about 60% of the time.

On Thursday, the Australian dollar was steady at $0.6568 after breaking above its 200-day moving average overnight.

With New Zealand’s rates set to cut in August, the Australian dollar is at a five-month high against the New Zealand dollar. On the greenback, the New Zealand dollar rose 0.7% overnight to reach $0.60.

The last time it traded was at $0.6013. Since December, sterling has also been trading in a range of $1.2645. A holiday closed Chinese markets.

At 104.22, the US dollar index was up 2.8% this year as market expectations for US rate cuts have been halved. Yesterday, it reached a four-and-a-half-month high of 105.10.

In the overnight trading session, US Treasury yields retreated slightly after rising earlier in the week. Eurozone PMI readings and the European Central Bank’s meeting minutes are due on Thursday.

Labor data due on Friday will dominate the rest of the week.

SEE ALSO:

Europe’s Inflation Rate has Fallen Again. Rates Will Rise Up Because