US payrolls may pour cold water on the dollar’ s mome… – MENAFN.COM

US mena payrolls dollar cold
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US payrolls may pour cold water on the dollar’ s mome… – MENAFN.COM

The recent hawkish shift from the Fed has pushed the notion of a data-dependent approach to future policy moves, and data releases are playing an increasingly larger role in driving market moves. From an FX perspective, positive data surprises should benefit the dollar through the rate expectations channel, as further signs that the US economy is indeed overheating should fuel expectation of earlier action by the Fed. Tomorrow's US jobs-report for the month of June should set the tone for markets and the Fed's rate expectations for the rest of July. Our US economist estimates the headline non-farm payrolls (NFP) print to fall within the 550-600k range. While arguably a fairly solid read, consensus is centred for a stronger headline figure (around 710k): should our estimates prove correct, the data miss should provide enough reasons to the market to a) believe the Fed's hawkishness has reached a peak for now, and b) settle for a"quiet"/low-volatility summer. Dollar's response to payrolls asymmetrically tilted to the downside in 2021 A look at previous NFP releases can provide some guidance on what reaction to expect in the FX market tomorrow. As shown in the second column of the table below, there has been

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