Investing.com – The US dollar held steady on Monday as traders awaited a speech from Fed Chairman Jerome Powell later in the session ahead of Friday’s key employment report.
At 04:25 ET (08:25 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading marginally lower at 100.035, after posting its fourth straight weekly decline last week and the ninth on record. last 10.
Dollar looks at the payrolls
The US dollar retreated last week as price pressures signaled by the Federal Reserve continued to ease shortly after the US central bank began its rate-cutting cycle.
Federal Reserve Chairman Jerome Powell was scheduled to speak Monday before the National Association for Business Economics in Nashville, Tennessee, and is expected to address the Fed’s decision to cut interest rates by half a percentage point earlier this month.
A survey of professional forecasters from the group released Sunday called a “monetary policy error” the “biggest downside risk to the U.S. economy over the next 12 months.”
The next key data point that could guide the pace of U.S. rate cuts arrives in the form of Friday’s October report, with economists expecting the U.S. economy to have added 144,000 jobs.
“The Federal Reserve’s increased focus on the employment side of its mandate means high market sensitivity to the details of the release,” ING analysts said in a note. “If we are right in our call to raise the unemployment rate a notch, expect a softer dollar as markets hold on to expectations of a half-point Fed cut in November or December.”
The euro is preparing to release inflation
In Europe, yields rose 0.1% to 1.1172, broadly steady ahead of the release of September flash inflation data on Tuesday, which will be closely watched as European Central Bank officials consider the question of whether they should cut interest rates again in October.
German inflation figures are ahead of , and follow last week’s data showing that inflation in France and Spain rose less than expected, raising expectations for an ECB rate cut in October.
“If we end the week with slower than expected Eurozone inflation and somewhat weaker US wage data supporting a 50 basis point Fed cut, we expect the Euro to be among the laggards in a weak USD environment now markets are reinforcing bets that the ECB will do so. continue to make cuts in October,” ING said.
“A new short-term move towards 1.1200 is possible in EUR/USD due to some USD weakness, but unless we see surprisingly strong inflation in the Eurozone, a major breakout may not be in the offing.”
traded 0.2% higher at 1.3399, not far from last week’s high of 1.3430, climbing to a level not seen since February 2022.
Data released earlier Monday showed second-quarter growth was slower than previously thought, as gross domestic product grew 0.5% from April to June.
The outcome was slightly weaker than a preliminary estimate of 0.6%, and below expectations for a further increase of 0.6%.
The Yen gives back some gains
rose 0.2% to 142.44, with the Japanese yen giving up some of last week’s gains after the country’s incoming prime minister signaled that monetary policy should remain accommodative.
The yen rose on Friday as Shigeru Ishiba, a former defense minister and former critic of aggressively easy policies, took charge of the ruling Liberal Democratic Party.
Moreover, Japanese fell 3.3% on the month in August, while down 5.1% year over year.
rose to 7.0120 and stabilized after Beijing’s round of stimulus measures led to a rally in the Chinese yuan last week, breaking below the psychological barrier of 7 per dollar on Friday
