USD mixed ahead of key BLS payroll revisions – BBH

The US Dollar (USD) is trading mixed as investors await the Bureau of Labor Statistics’ benchmark revisions, which could slash reported payroll growth by as much as 700k over the past year. A sharper downgrade would reinforce expectations of aggressive Fed rate cuts, with markets pricing 140bps of easing over the next twelve months, BBH FX analysts report.

Fed’s focus on jobs signals scope for deeper easing

"USD is mixed and trading in line with narrowing US-G6 rate differentials. Ultimately, a more dovish Fed policy stance can drag USD to new cyclical lows. We expect the Fed to prioritize maximum employment over price stability within its dual mandate given that monetary policy is moderately restrictive."

"Today, the Bureau of Labor Statistics (BLS) will release the preliminary benchmark revisions to net payroll growth for the 12 months ended in March 2025 (3:00pm London, 10:00am New York). Analysts estimates that monthly job creation will be reduced by an average of about 58k a month (or 700k annually), compared with the average monthly gain of 149k currently reported."

"A larger downward revision to payroll growth would raise concerns about the US labor market and lift Fed funds rate cut bets against USD. Futures price in nearly 75bps of rate cuts by year-end and 140bps of easing in the next twelve months."