Fed officials are unlikely to read too much into latest US jobs data – DBS
The Dollar Index (DXY) rebounded by 2.1% to 102.52 last week, its first weekly increase in five weeks, DBS’ FX analyst Philip Wee notes.
DXY’s upside limited to around 103
“Following the stronger-than-expected US jobs data last Friday, the futures market rescinded its bet for a second 50 bps rate cut at the FOMC meeting on November 7, opting instead for a reduction of 25 bps.”
“Fed officials speaking this week will welcome September’s nonfarm payrolls rising to 223k from 159k in August and the unemployment rate falling to 4.1% from 4.2%. However, they will caution against reading too much into one month’s data and maintain the path of reducing monetary policy restrictions.”
“Given our view that the Fed Funds Rate will decline another 200 bps through 2025, we see the DXY’s upside limited to around 103 before resuming its depreciation.”
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