Dollar Under Pressure Ahead of NFP: Stronger Rate Cut Signals?
The US Dollar exchange rate weakened on Friday (3/7), with the Dollar Index (DXY) falling below the 97.00 level, approaching its lowest position in recent years. This weakening occurred because investors were cautious and chose to wait for the release of the Nonfarm Payrolls (NFP) data from the US which will be released tonight. This data is considered as one of the important indicators that can determine the direction of interest rate policy by the Federal Reserve (The Fed) in the future.
Pressure on the Dollar increased after the ADP Employment report released earlier showed that the US private sector lost 33,000 jobs in June. This figure was far below market expectations which estimated an increase of 95,000 jobs, and was the first decline in more than two years. This situation strengthens speculation that the Fed will cut interest rates in the near future, possibly starting in July or September.
Meanwhile, the announcement of a trade agreement between the US and Vietnam by President Donald Trump has not been able to lift sentiment towards the Dollar. While the deal includes a 20% tariff on Vietnamese imports, the market is more focused on the uncertainty of US economic data and potential monetary easing. If tonight's NFP data is also weak, the US dollar could potentially hit a new low, and the market could become more convinced that a rate cut is imminent.
Source: (ayu-newsmaker)
