US payrolls key for USD moves

Market reports
Thanim Islam
  • Powell dovish comments cause further declines on USD
  • ECB revise growth and inflation lower
  • Nonfarm payrolls key for USD today
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We saw USD take another leg lower yesterday following comments from Fed Powell stating “we’re not far from confidence to cut rates”. 2-year and 5-year treasury yields declined, and GBPUSD and EURUSD climbed back to previous resistance levels, which was welcome news for our clients who placed orders near the 2024 highs. The EUR declined initially after the ECB revised lower growth and inflation forecasts, with markets betting on 100 bps worth of rate cuts, up from 90 bps expected before the meeting. Lagarde indicated a June cut seems more likely. EUR weakness was very short lived, with the currency erasing the earlier losses by the end of the day.


Market rates

*Daily move - against G10 rates at 7:30am, 08.03.24

** Indicative rates - interbank rates at 7:30am, 08.03.24

Table - 2024-03-08T090700.120

Data points

Table - 2024-03-08T090702.265


  • None today.

Our thoughts

After a week of USD decline on the back of dovish comments from Fed Powell and data from the jobs market, all eyes today on the non-farm payroll print and hourly earnings. Both GBPUSD and EURUSD have accelerated higher much to the joy of our USD buyers who had orders executed, and today's numbers will either cement this USD weakness or we could see a sharp reversal. Consensus in the market seems to be a lot of the bad data has been priced, so any additional USD weakness from today's numbers could well be short lived. Either way USD buyers will do well to take advantage of the recent weakness in the currency.

Earlier in the day we also have the final readings of GDP from Europe, expected to remain the same at 0% growth in Q4.

Chart of the day

It's been a week for the doves when it comes to the US dollar, following data suggesting chinks in the armoury of the US economy and the job market, as well as dovish comments from Fed Powell. Today's job numbers are expected to come in softer than January, once again illustrating that the job market is cooling. Given the weak numbers this week, as well as weakness indicated in today's numbers, is it fair to say a lot of the dovish calls on rates is priced in? USD buyers will be on alert following the release at 1.30pm.

08032024 cotd
Source: Bloomberg Finance L.P.

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