Morning Bid: Cracks show in dollar's reign
A look at the day ahead in European and global markets from Rae Wee
The dollar's 1% fall for the week thus far is set to be its steepest in nearly three months, and tonight's U.S. jobs data is the next test for the greenback.
It would take a very, very strong number to change the outlook for U.S. rates, given how Federal Reserve Chair Jerome Powell has already opened the door to cutting rates even if unemployment stays low, as long as inflation continues to slow.
Forecasts are for nonfarm payrolls to have increased by 200,000 in February, down from January's blowout 353,000 gain.
«We believe fewer end-of-year layoffs produced (the) temporary spike, and with the seasonal layoff period now behind us, we assume a return towards a more normal pace of job gains,» analysts at Goldman Sachs said.
So for now, the first of the Fed's rate cut seems to be within sight — unless next week's U.S. inflation report proves otherwise.
The dollar has thus far been the clearest reflection of the easing expectations, with its recent move lower and buoyant risk sentiment hoisting the Aussie back above the $0.6600 level.
Record peaks for gold and bitcoin this week also show the dollar's vulnerability.
The euro, too, is at a two-month high and eyeing its best week against the dollar in months, even as the European Central Bank (ECB) on Thursday laid the ground for a rate cut in June and lowered its inflation forecast.
TURNING THE PAGE
While most of the world focuses on the global easing cycle, over in Japan, it seems the time is ripe for a rate hike.
Bank of Japan (BOJ) officials have begun ramping up their hawkish rhetoric and shown increasing confidence that the Japanese economy was moving towards the BOJ's 2% inflation target, just ahead of
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