One Data Point Could Change the Dollar's Direction
The US dollar moved steadily at the start of the week, with the DXY index holding around 99.33, as the market awaited the release of the September US nonfarm payrolls data, which was delayed due to the government shutdown. This report will be released on Thursday, after the government officially resumes operations. Investors hope the data will provide a clearer indication of whether the Fed will cut interest rates again next month or will hold off.
Beyond the NFP, the market will also be focusing on the Fed's meeting minutes on Wednesday and the US PMI data on Friday. These three releases are considered a complete package for assessing the direction of the US economy and the central bank's future stance. So far, recent comments from Fed officials have tended to be cautious about rate cuts, as they lacked official data to base their decisions on during the shutdown.
Jefferies economist Mohit Kumar even called the December Fed meeting a "coin toss": the odds of a rate cut or a hold remain equally strong, as the available data is not yet conclusive enough to point in either direction. The market is also curious—will this week's data series shift that balance and finally move the US dollar out of its "silent" phase? (Asd)
Source: Bloomberg
