He global dollar The dollar was broadly stable in early Friday but fell to one-month lows against the yen ahead of the release of payrolls data. USA, a fundamental fact that could determine the level with which the Federal Reserve (Fed) progress on the first interest rate cut, expected within ten days.
He dollar index —which measures the performance of the greenback in relation to a basket of six other currencies of international relevance— remained stable at around 101.04 units at the beginning of the last exchange day of the week. However, in comparison with the yen, briefly hit a one-month low.
It also hit a one-week low against the euro.
Caution on labor market data
Caution is the dominant sentiment among traders as they await the release of payrolls. mixed data of the week left doubts, with economists polled by Reuters predicting an increase of 160,000 jobs in August, compared with an increase of 114,000 in July.
Along those lines, a report on Thursday showed that the number of Americans filing new applications for unemployment benefits fell last week as layoffs remained low. That helped allay fears that the labor market was deteriorating rapidly, after figures released the previous day showed private employment growth fell to a three-and-a-half-year low in August.
Traders currently see a 41% chance of a sharp 50 basis point interest rate cut by the Fed. Fed on September 18, compared with a 59% chance of a quarter-point reduction, according to the tool FedWatch of the CME Group. The day before, bets on a further drop stood at 44%, although a week ago they were 30%.
The how of it Fed receive the payroll figures will be known almost immediately, since the governor Christopher Waller and the president of the Fed of New York, John Williamswill take the podium in the central bank’s final speech before the lockdown period begins ahead of the month’s monetary policy meeting.
“Recent employment data has fueled fears of a weakening labor market (and) the August payrolls report could be a defining moment,” analysts at the firm wrote in a report. TD Securities, including the head of global strategy, Rich Kelly.
However, TD expects 205,000 jobs to have been added in August, which would be a quarter-point cut this month and trigger a rally in the dollar. “There’s just a lot of bad news priced into the dollar, which increases the risks that a series of good news will trigger a correction considerable,” they noted.
In Uruguay, the dollar cut two days of growth
In Uruguay, Meanwhile, the dollar fell 0.08% compared to Wednesday, closing at 40.350 pesos in the interbank quote. Central Bank (BCU), thus breaking two consecutive days of growth after reaching a new high in more than 20 days.
The greenback has accumulated a tiny negative variation on a monthly basis (0.004%) and a positive annual variation of 3.36%, since its price is 1.31 pesos above the one registered after the closing of the last exchange day of last year.
Source: Ambito
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