US dollar update
US dollar Summary
The U.S. Bureau of Labor Statistics documented a rise of 199,000 in Non-Farm Payroll employment, surpassing the expected increase of 180,000. Additional details from the publication indicate that the Unemployment Rate decreased from 3.9% to 3.7% during the same period. Meanwhile, the annual wage inflation, measured by the change in Average Hourly Earnings, remained constant at 4%, aligning with analysts’ predictions. Lastly, the Labor Force Participation Rate saw a slight increase from 62.7% to 62.8%. The U.S. Dollar strengthened against its competitors in the initial response. As of the latest update, the U.S. dollar Index performs a significant daily increase, reaching 104.20.
Market Views & Opinions
Danske Bank at today’s research regarding the Fed preview says that “We do not anticipate the Fed to make changes to its monetary policy in the December meeting, in line with broad consensus and market expectations. Focus will be on the updated economic projections, where the 2024 ‘dot’ could be revised slightly lower, yet still above market pricing. Growth forecasts could be lifted slightly, while inflation projections are likely to remain mostly unchanged. We stick to our long-standing view that the Fed will initiate quarterly 25bp rate cuts from March. Current pricing signals limited downside potential for longer-dated UST yields, but still rhymes with lower EUR/USD in 2024.”
Commerzbank’s market-oriented research says about the U.S. dollar “We expect the Fed to cut the federal funds rate by a total of 100 basis points from 3 Economic Research mid-2024 until the end of the year, and by a further 50 basis points in early 2025. This would be only slightly later than the market currently expects.”
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