• 172 days Will The ECB Continue To Hike Rates?
  • 172 days Forbes: Aramco Remains Largest Company In The Middle East
  • 174 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 574 days Could Crypto Overtake Traditional Investment?
  • 579 days Americans Still Quitting Jobs At Record Pace
  • 581 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 584 days Is The Dollar Too Strong?
  • 584 days Big Tech Disappoints Investors on Earnings Calls
  • 585 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 587 days China Is Quietly Trying To Distance Itself From Russia
  • 587 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 591 days Crypto Investors Won Big In 2021
  • 591 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 592 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 594 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 595 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 598 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 599 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 599 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 601 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Dollar Sinks as Jobs Blur Fed Picture

The 71K upward revision in the November jobs report may have offset the weaker than expected December figure (108K vs expectaions of 200K), but the final outcome has deepened the dollar gloom.

The Euro is less than half a cent away from regaining its 200-day moving average, a feat not attained since May 2005.

Today's payrolls report would not have mattered for the recently damaged US dollar. Considering the 95% probability of a 25-bp rate hike in January priced by the market prior to this morning's report, a strong reading would naturally not have altered that probability. And given the fact that the following FOMC meeting is nearly 2 months away from today, it is too far ahead to make predictions far out based on a jobs report from December - which is 3 months lagged. Besides, going into the March 28 meeting, markets and the Fed would be equipped with data from the January and February labor reports, which reduce the relative importance of today's numbers.

Given the considerable certainty of a January 31 rate hike (current market probability at 80%), the probability curve can only change towards a decision to hold, a rude awakening for the dollar.

As for the Fed March 28 meeting (where we continue to expect no move), it remains too far ahead to serve as a reliable foundation for dollar bulls, especially given the Fed's increasingly data-dependent stance. If anything, the odds for a no change would likely increase the current 40-45% probability - again another dollar negative outcome.

Back to homepage

Leave a comment

Leave a comment