"The dollar was relatively volatile on Friday after the latest US labour market report failed to provide a clear signal on the Federal Reserve's next policy step. However, the greenback remains on track to finish the week higher, supported by reduced expectations of a December rate cut, now priced at roughly 33%. The nonfarm payrolls report added to the uncertainty."
"Job creation surprised to the upside in September, but the unemployment rate rose to 4.4%, the highest in four years. Investors are left with a data mix that complicates the Fed's assessment of labour momentum versus inflation risks, painting a clouded outlook for the greenback. Comments from Fed officials could support the dollar and yields as they stressed the need for caution, highlighting persistent inflation risks."
The US dollar showed volatility after mixed labour market signals, yet remained on track for a weekly gain as markets reduced odds of a December Fed rate cut to about 33%. Nonfarm payrolls surprised on the upside while the unemployment rate rose to 4.4%, the highest in four years. The resulting data mix complicates the Fed's judgement on labour momentum versus inflation risks and clouds the dollar outlook. Fed officials emphasized caution and persistent inflation risks, which could support the dollar and yields. Upcoming ADP and PPI reports could drive further volatility and inform monetary policy direction.
Read at London Business News | Londonlovesbusiness.com
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