Dollar just higher ahead of payrolls; euro hands back some gains
Investing.com — The U.S. dollar edged higher in early European trade Friday, but was still on course for a hefty weekly drop as Federal Reserve Chair Jerome Powell signaled lower interest rates in coming months, while the euro slipped back from recent highs after the European Central Bank meeting.
At 04:15 ET (09:15 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded just higher at 102.787, on course for a weekly loss of around 1%, which is set to be its steepest in nearly three months.
The dollar is rebounding slightly Friday after being hit hard in the previous session in the wake of comments from Jerome Powell, as the Fed chief completed his two-day testimony in front of Congress.
«We are waiting to become more confident that inflation is moving sustainably down to 2%,” Powell said in a hearing before the Senate Banking Committee. “When we do get that confidence, and we’re not far from it, it will be appropriate to begin to dial back the level of restriction so that we don’t drive the economy into recession.”
This has been taken by the markets that the Fed is preparing to move, probably in the summer, and thus it would take a very strong jobs number later this session to change sentiment.
Forecasts are for nonfarm payrolls to have increased by just under 200,000 in February, down from January's massive 353,000 gain, while average hourly earnings are seen rising just 0.2% on the month, a slowing from the 0.6% gain the prior month.
“The payrolls will determine the direction of FX markets today. Following Powell’s testimony, we suspect markets will not be too reluctant to price in more cuts,” said analysts at ING, in a note.
In Europe, EUR/USD edged 0.1% lower to 1.0938,
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