Full pricing of the prospects of a US interest rate cut this month The market awaits important data on the US labor market
The US dollar fell in the European market on Monday against a basket of major and minor currencies, giving up the two-week high recorded earlier in Asian trading, in the process of suffering the first loss in the last four days, due to corrections and profit-taking activity.
With the possibility of a US interest rate cut in September fully priced, investors are awaiting the release of important data on the US labor market throughout the week, with the aim of surveying the pace at which the Federal Reserve will cut the federal funds rate.
Price outlook • US dollar index price today: The dollar index fell nearly 0.2% to (101.57) points, from the opening level of today’s trading at (101.73) points, and recorded the highest level at (101.80), the highest since August 20.
The index ended Friday’s trading up about 0.4%, in the third consecutive daily gain, thanks to the rise in the yield on ten-year US Treasury bonds.
The US dollar index lost 2.2% in August, in the second consecutive monthly loss, and the largest monthly loss in 2024, specifically since November 2023.
Fed Chairman Jerome Powell has forcefully opened the door to adjusting U.S. monetary policy and cutting interest rates starting in September.
US Interest Interest • According to CME Group’s FeedWatch: The pricing of the probabilities of a US interest rate cut of about 50 basis points at the September meeting is currently stable at 31%, and the pricing of the prospects of a cut by about 25 basis points at 69%.
In order to reprice those possibilities, investors await the release of several important data on the US labor market throughout this week.
• Wednesday, the available job opportunities at the end of July, the US private sector jobs for August and weekly unemployment claims are released on Thursday, and the August jobs report is released on Friday.
If the US labor market data comes in worse than market expectations, the odds of a US interest rate cut will rise by about 50 basis points in September, which will lead to a fall in the US dollar against a basket of global currencies.
Read also:August Dollar Weakens Helps Global Economies
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