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The US economy added 517,000 jobs in January and unemployment dropped to new five-decades low, which strengthens the Fed’s view on the appropriate policy path and sent the pair lower on Friday
The US non-farm employment change data shows that 517K jobs were created in January. It was a surprise to the upside and exceeded the most optimistic forecast. The unemployment rate declined further to 3.4%.
Both central banks raised their benchmark rates by another 0.5% as expected, but the Bank of England softened its messaging, whereas its European peer remained aggressive, despite some less hawkish elements
The ECB hiked rates by 50bps today, maintaining that another 50bps is coming in March. However, the press conference delivered by president Lagarde proved to be confusing. Besides, obscure phrases like “continuity in a steady state”, she pointed to data dependency and a “meeting by meeting” approach. This suggests the 50bps in March is not a done deal. The market interpreted the press conference as dovish and the EURUSD sold…
Watch today’s US Open for commentary on the Fed’s feeble pushback against market expectations for a pivot, the BoE’s dovish hike and the ECB’s explicit guidance for another 50 bps rate increase
The pair covers most of the losses from the increase in New Zealand’s unemployment and lacks firms direction, as markets gear up for the monetary policy decision by the US Fed
USDOLLAR showed resilience over the last few trading sessions. Yesterday showed a crack. There is a risk of heightened dollar volatility.
Watch today’s US Open for insights on the upcoming central banks blitz, as the US Fed, the Bank of England and the European Central Bank announce their monetary policy decisions
Heading towards the Fed release on Wednesday a sense of caution prevails. Despite the market looking for a pivot, the Fed has maintained an aggressive stance.
The pair is on the back foot ahead of the monetary policy decisions by the US Fed and the European Central Bank, despite expectations for a more aggressive move by the ECB
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