2024-02-03 04:51:11
Strong employment data
“The employment data gives a pretty clear signal – the dollar will at least continue to hold its ground as long as demand for jobs in the US remains strong and wages remain high – which means… “Basically about renewing the existing narrative that the country is going through an exceptional situation.”
The dollar is heading towards its highest levels since December
Today’s jobs report showed that US employers added 353,000 jobs to payrolls last month while hourly wages jumped 0.6% month over month, hitting their highest levels since March 2022.
The data boosted Treasury bond yields for all maturities, pushing the dollar back near the level it was at before US Federal Reserve Chairman Jerome Powell hinted last December that the bank would likely ease monetary policy this year. Swaps speculators have reduced bets on a rate cut next March to approximately 15%, although they still place high odds on the start of a series of rate cuts next May.
Locke said the expected pace of interest rate cuts remains “apparently aggressive” compared to other central banks, which “should also help protect the dollar from a significant decline in its value.”
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