Today’s US non-farm payrolls data provided some relief to the US dollar, but it still looks set to end the week lower against most major currencies. This weakness mostly reflects the market reaction to Fed Chair Powell’s much-anticipated speech on Wednesday. While his comments were not dovish per se, he did not push back against the recent easing of financial conditions. As a result, US interest rate expectations fell sharply, dragging the dollar down. The soft core PCE data on Thursday reinforced the narrative of an imminent Fed “pivot”.
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