The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, had its worst week in more than a year, down more than 3.5% since Monday and trading near 103.70 at the time of writing on Friday (07/3). The greenback is undergoing a regime change where the US Dollar is no longer favored by traders. The interest rate differential between the Federal Reserve (Fed) and other central banks is set to narrow after Fed Governor Christopher Waller said on Thursday that there could be two to three rate cuts this year.
On the economic data front, all eyes are on Friday's Nonfarm Payrolls release. Expectations are for 160,000 jobs to be added in February, although analysts' range could not be wider, with 30,000 on the low end and 300,000 on the high end. That means any print near 30,000 or even negative could mean another sharp decline for the Greenback.
Daily market summary: NFP already sideways?
At 13:30 GMT, the US employment report for February will be released:
Nonfarm Payrolls are expected to come in at 160,000 compared to the previous figure of 143,000 in January.
Average Hourly Earnings will weaken month-on-month to 0.3% compared to 0.5%.
The Unemployment Rate will remain steady at 4%.
At 15:15 GMT, Fed Governor Michelle W. Bowman discusses "Post-COVID Monetary Policy Transmission" at the University of Chicago Booth School of Business's US Monetary Policy Forum 2025 in New York. At 15:45 GMT, Federal Reserve Bank of New York President John Williams participates in a discussion of the US Monetary Policy Forum Report titled "Post-COVID Monetary Policy Transmission" at the University of Chicago Booth School of Business in Chicago, Illinois.
At 17:20 GMT, Fed Governor Adriana Kugler speaks on ‘Rebalancing Labor Markets Around the World' at the Bank of Portugal Conference on Monetary Policy Transmission and Labor Markets in Lisbon, Portugal.
At 17:30 GMT, Fed Chair Jerome Powell delivers a speech on the economic outlook at the University of Chicago Booth School of Business 2025 U.S. Monetary Policy Forum in New York.
At 18:00 GMT, Fed Governor Adriana Kugler delivers a speech on the economic outlook at the University of Chicago Booth School of Business 2025 U.S. Monetary Policy Forum, in New York.
Equities appear very divided on Friday with European indices in the red while U.S. futures are slightly in the green.
Following the latest U.S. economic data and Fed policymakers' comments, the CME Fedwatch Tool projects a 46.8% chance of a rate cut at the May meeting compared to a 33.3% chance a week ago.
The 10-year US Treasury yield is trading around 4.26%, down from a near five-month low of 4.10% hit on Tuesday. (Newsmaker23)
Source: FXstreet
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