Traders’ expectations for a sharp new Fed rate cut were reduced by the solid jobs report in the United States.
He global dollar reached a seven-week high in the early hours of Friday, after data showed that in USA More jobs than expected were created in September, prompting traders to reduce bets that the Federal Reserve (Fed) will cut rates again by 50 basis points at its November meeting. In Uruguay, The currency accumulated a second consecutive day of decline.
He dollar index —which measures the performance of the greenback in relation to a basket of six other currencies of international relevance— stood at 102.64 units, the highest level since August 16, after the publication of non-agricultural payrolls showed an increase of 254,000 jobs last month, when previous estimates pointed to just an increase of 140,000 positions, as reported by Reuters.
Unemployment also unexpectedly fell to 4.1% from 4.2% in August.
It’s a “blockbuster payrolls report by any measure. I think a no-landfall scenario for the U.S. economy has suddenly become much more plausible,” he said. Karl Schamotta, chief market strategist at Corpay in Toronto. “Expectations of rate cuts are receding and the expectation now would be that the Federal Reserve act with much more caution in making its policy more flexible,” he added.
Improving economic data and more hawkish comments from Fed Chair Jerome Powell on Monday, in which he rejected expectations of continued giant rate cuts, have led traders to reduce bets on a rate cut. 50 basis points at the next meeting of the Federal Open Market Committee (FOMC) on November 6 and 7.
Those odds fell further after Friday’s data: Traders are now pricing in just a 10% chance of a 50 basis point rate cut, down from around 32% on Friday, the tool shows. FedWatch of the CME Group.
Second negative day for the dollar in Uruguay
In Uruguay, meanwhile, the dollar fell 0.32% compared to Wednesday, closing at 41,670 pesos in the interbank price of the Central Bank (BCU), thus chaining two consecutive days of decline and continuing with its operations within the range of 41 pesos.
The US currency now accumulates a monthly variation of 0.07% and an annual variation of 6.79%, since its price is 2.65 pesos above that registered after the closing of the last exchange day of last year .
Source: Ambito
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