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Forex Today: US Dollar, Strong Returns on “No Landing” Speculation

Forex Today: US Dollar, Strong Returns on “No Landing” Speculation

In particular, positive US employment data released on Friday pushed the US dollar and Treasury yields sharply higher, suggesting that the Fed will be more reluctant to cut rates.

➡️ Last Friday, the U.S. released significantly stronger-than-expected jobs and average earnings data. Nonfarm payrolls rose by nearly 100,000 jobs more than expected, while average hourly earnings rose by 0.4% month-over-month, above the consensus forecast of 0.3%.. This suggests that the environment is not ideal for the Fed to make large or even minor rate cuts, but these cuts had already been priced in.. This sent the US dollar and its Treasury yields skyrocketing for much of the New York session on Friday and calls into question the greenback's long-term bearish trend. It is worth mentioning that 80% of market participants expect another 0.50% of cuts before the start of 2025.

➡️ The Japanese yen saw dramatic weakening last week on high levels of volatility. Japan’s “FX Ambassador” Mimura has warned that he will be monitoring the FX market for speculative movement in the yen. This means that outsized movements in the yen could face a boost from its central bank, so it is something for yen traders to keep in mind. It is by far the most volatile major currency in the Forex market.

➡️ It will likely be a quiet day on the markets, with no major data releases scheduled.

➡️ Gold and the S&P 500 index remain relatively close to their recent all-time highs, despite the rise of the US dollar.

 

Credit by DailyForex.com

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