Joseph Dahrieh: Dollar Stabilised Ahead of NFP

5 Nisan 2024

Today’s markets analysis on behalf of Joseph Dahrieh, Managing Principal at Tickmill

The dollar index stabilized in the early trading session, regaining some of the losses incurred since Tuesday and Wednesday’s pullback.
This stabilization followed remarks from Federal Reserve officials casting doubt on the timing of potential interest rate cuts.
Market participants are now eagerly awaiting the Non-Farm Payroll report later today, which could potentially introduce volatility to the greenback.
Should March’s NFP figures fall below the market consensus of 200K, a decline from February’s 275K, the dollar may face further near-term downward pressure.
Yesterday, Minneapolis Fed President Neel Kashkari stated that if inflation remains persistent, there may be no need for rate cuts this year.
Fed Chair Jerome Powell also mentioned on Wednesday that the central bank requires more evidence of sustainable inflation movement toward the 2% target before considering rate cuts.
This stance, combined with a robust U.S. economy and persistent inflation, could lead market participants to reassess their expectations for the timing of the first Fed rate cut which is currently anticipated in June, with approximately 75 basis points of reductions factored in for the year and could support the dollar.