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02/07/24
106
USD Lower as Upbeat Jobs Data is Offset by Fed’s Powell’s Dovish Comments
On Tuesday, the US dollar dropped in choppy trading after Federal Chair Jerome Powell was slightly dovish in his comments, indicating that the U.S. central bank will likely begin its easing cycle later in the year.
Powell said in a monetary policy conference in Portugal that the U.S. economy has made progress on inflation and was moving back to the disinflationary path. According to analysts, his remarks were seen as dovish.
The remarks by Powell offset data that showed U.S. job openings in May increased after posting big declines in the previous two months. According to the JOLTS report, job openings, a gauge of labor demand, rose 221K to 8.14M on the last day of May.
Economists had expected 7.91M job openings in May. In March 2022, unfilled positions rose to a record 12.182M.
According to LSEG calculations, U.S. rate futures are pricing in a 69% percent probability of a rate cut in Sept. after Powell’s comments and the JOLTS report, up from Monday’s about 63%. The market has also priced in between one and two rate cuts this year.
In late morning trading, the U.S. dollar index, which measures its strength against 6 other major currencies, was 0.1% lower at 105.74.
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