"In my view, the U.S. Dollar Index's stability above the 98.50 level reflects a state of cautious anticipation in the market rather than genuine strength in the U.S. currency. This price consolidation, despite the fragility of recent economic data, confirms that investors remain highly cautious at this stage and prefer to hold their positions until the outlook becomes clearer, especially with the Nonfarm Payrolls report approaching."
"From my perspective, this behaviour reflects a temporary balance between concerns over a U.S. economic slowdown on one hand and the dollar's traditional role as a safe haven on the other-a balance that I believe could quickly break with any surprise in labour market data. I believe that the soft data released ahead of the jobs report has played a key role in limiting any strong upside momentum for the Dollar Index."
"This is why closely monitoring U.S. initial jobless claims is especially important at this stage-not only because of their direct impact, but also because they serve as a leading indicator for the Nonfarm Payrolls report. If claims come in higher than expected, this would reinforce the belief that the U.S. labour market is beginning to lose momentum, which could quickly weigh on the Dollar Index."
U.S. Dollar Index remains stable above 98.50, reflecting cautious anticipation rather than clear currency strength. Price consolidation persists despite fragile recent economic data, prompting investors to hold positions ahead of the Nonfarm Payrolls report. Market positioning reflects a temporary balance between concerns about a U.S. economic slowdown and the dollar's safe-haven role, a balance vulnerable to surprise labor-market signals. Soft pre-jobs data has limited upside momentum for the Dollar Index. Higher-than-expected initial jobless claims would reinforce expectations of labour-market weakening, potentially prompting traders to reduce long-dollar positions and increasing downward pressure on the dollar.
Read at London Business News | Londonlovesbusiness.com
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