Dollar Furious, Jobs Data Missing — What's Wrong with the Fed?
The US Dollar Index (DXY), which measures the USD's strength against six major currencies, continued to strengthen for the fifth consecutive day and was trading around 100.30 during the Asian session on Thursday. This strengthening occurred amid market anticipation for the release of the US Nonfarm Payrolls (NFP) data for September, due tonight, which is considered crucial for determining the direction of the Fed's future interest rate policy.
The situation is further complicated by the fact that the US Bureau of Labor Statistics (BLS) has stated that it will not release its regular employment report for October. This is because household survey data cannot be collected retroactively after the government shutdown. The missing figures will only be included in the November report, which is also delayed, leaving the Fed without a crucial data set for its decision-making.
The US dollar itself strengthened more than 0.5% in the previous session, approaching a five-month high of 100.36, which it touched on November 5. This strengthening was triggered by the latest FOMC Meeting Minutes, which showed that the market was beginning to reduce expectations for a Fed rate cut in December. In the minutes, Fed officials appeared divided: many still saw a rate cut as "appropriate over time," but some did not consider a December cut to be appropriate.
Data from the CME FedWatch Tool now shows the market sees only about a 33% chance that the Fed will cut its benchmark interest rate by 25 bps at the December meeting, down sharply from around 63% a week ago. This means that market participants are increasingly inclined to believe that high interest rates will be maintained for longer, and this is the main fuel for the strengthening of the US dollar ahead of tonight's NFP release. (az)
Source: Newsmaker.id
