Home ForexArticles The dollar barely rises before payrolls; the euro gives back some gains By Investing.com

The dollar barely rises before payrolls; the euro gives back some gains By Investing.com

by SuperiorInvest

© Reuters.

Investing.com – The U.S. dollar gained early in European trading this Friday, but was still on track for a sharp weekly decline as Federal Reserve Chair Jerome Powell announced interest rates lower in the coming months, while the euro retreated from recent highs after the European crisis. Central Bank Meeting.

At 04:15 ET (0915 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, was trading slightly higher at 102.787, on track for a weekly loss of about 1%. , which is expected to be its steepest level in nearly three months.

Dollar faces sharp weekly loss

The dollar is recovering slightly on Friday after being hit hard in the previous session in the wake of comments from , as the head of the Federal Reserve completed his two-day testimony before Congress.

“We're hoping to have more confidence that inflation is sustainably coming down to 2%,” Powell said at a hearing before the Senate Banking Committee. “When we have that confidence, and we are not far from it, it will be appropriate to start reducing the level of restriction so as not to push the economy into recession.”

This has been taken by the markets that the Federal Reserve is preparing to move, probably in the summer, and therefore it would take a very strong jobs number later this session to change sentiment.

Just under 200,000 are expected to rise in February, down from a huge increase of 353,000 in January, while growth is forecast to be just 0.2% for the month, a slowdown from the 0.6% rise in the month. last month.

“Payrolls will determine the direction of the foreign exchange markets today. Following Powell's testimony, we suspect markets will not be too reluctant to factor in further price cuts,” ING analysts said in a note.

Euro falls from almost two-month highs

In Europe, it was down 0.1% at 1.0938, with the euro retreating slightly after hitting a near two-month high on Friday ahead of the eurozone's latest quarterly reading.

Data released on Friday showed it rose 1.0% in January from the previous month, more than the expected 0.6% increase and a significant improvement from the previous month's revised 2% drop.

They left their benchmark rate stable at 4% and also laid the groundwork for a cut in June, similar to the scenes across the pond.

However, with the federal funds rate between 5.25% and 5.5%, traders believe the Federal Reserve has more room to make aggressive cuts.

“US payrolls will determine the direction of EUR/USD: some resistance is expected at the key 1.1000 level if the dollar continues to fall today,” ING added.

traded 0.1% higher at 1.2820, and sterling benefited from dollar weakness, rising more than 1% this week and hitting a new 2024 high earlier in the session.

Yen posts strong weekly gains

In Asia, the yen traded 0.2% lower at 147.76, with the yen gaining more than 1.5% so far this week, its strongest percentage gain since December.

Traders are positioning themselves for the Bank of Japan to be able to end negative interest rates in the near future, in direct contrast to the expected path of US rates.

The yen has weakened for most of the past two years as the Bank of Japan maintained its ultra-loose monetary policy stance while other major central banks aggressively raised interest rates to control inflation.

fell to 7.1922, while up 0.3% at 0.6637 and up 0.2% at 0.6182, with the Australian and New Zealand dollars up 1.5% and 1.1% on the week, respectively.

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