Key Takeaways:
- 💵 Dollar near two-week high awaiting U.S. economic data
- 🇯🇵 Yen strengthens after Bank of Japan governor’s interest rate raise comments
- 🇪🇺 Euro and sterling lose value against the dollar
- 📊 U.S. payrolls data on Friday crucial for Fed interest rate cut decision
- 📈 Markets expect 69% chance of 25 bps cut in FOMC meeting in September
- 📉 A 50 bps cut possibility at 31%, based on futures market data
- 💼 Economists predict 165,000 U.S. jobs increase in August
- 📆 Markets expect 100 bps rate cuts from remaining Fed meetings in 2019
- 🌏 Australian and New Zealand dollars decline on shaky risk sentiment
Market Focus Shifts to Economic Data
The currency markets are currently abuzz with anticipation as the U.S. dollar hovers near two-week highs in expectation of key economic data releases. The recent comments from the Bank of Japan governor have caused the yen to strengthen, breaking its losing streak against the dollar. On the other hand, the euro and sterling have seen a decrease in value against the dollar.
Impact of U.S. Payrolls Data on Federal Reserve Decisions
Investors and economists alike are eagerly awaiting the U.S. payrolls data scheduled for release on Friday, as it is deemed crucial for the Federal Reserve’s decision on potential interest rate cuts. Markets are currently pricing in a 69% chance of a 25 basis points cut in the upcoming FOMC meeting in September, with a 50 basis points cut possibility also on the table. Economists are projecting an increase of 165,000 U.S. jobs in August, further adding to the speculation surrounding Fed actions.
Uncertainty in Global Markets
As the risk sentiment remains shaky, the Australian and New Zealand dollars have experienced declines. The focus is now on how future economic data releases and central bank actions will shape the currency markets in the coming days.